Which One of the Following Items Is Not a Consideration

question 249

Multiple Choice

Which one of the following items is not a consideration when recording periodic depreciation expense on plant assets?

• A) Salvage value
• B) Estimated useful life
• C) Cash needed to replace the plant asset
• D) Cost

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Definitions:

Accounts Receivable

The amount that debtors are required to pay to a company for the goods or services they have received but have not yet compensated for.

Accounts Payable

Obligations of a business to pay for goods or services that have been delivered but not yet paid for.

Inventory

The total amount of goods and materials a company holds for the purpose of resale or production, including raw materials, work-in-progress, and finished goods.

Profit Margin

A financial ratio that calculates the amount of net income earned with each dollar of sales by dividing net profit by total revenue.