All of the Following Are Relevant to the Decision to Replace

question 74

Multiple Choice

All of the following are relevant to the decision to replace equipment EXCEPT the:

• A)original cost of old equipment.
• B)future maintenance costs of old equipment.
• C)cost of new equipment.
• D)selling price of old equipment.

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Definitions:

Sales Returns & Allowances

Transactions where sellers accept returned goods from buyers, or provide a price reduction or discount, reducing the initial sales revenue.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and net income or loss.

Perpetual Inventory Method

An inventory accounting method where updates to the inventory records are made immediately following each sale or purchase.

Sales Returns and Allowances

A reduction in sales revenue that occurs when customers return goods or receive allowances for unsatisfactory goods, impacting the net sales figure.