Which of the Following Would Be Considered an Operating Asset

question 196

Multiple Choice

Which of the following would be considered an operating asset in return on investment computations?

• A) Land being held for plant expansion.
• B) Treasury stock.
• C) Accounts receivable.
• D) Common stock.

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Definitions:

Gross Price Method

An accounting method where inventory purchases are recorded at their gross price, without deducting any available cash discounts.

Net Realizable Value

The estimated selling price of goods, less the costs of their sale or disposal.

Bad Debt Expense

The cost associated with accounts receivable that a company does not expect to collect because customers default on payments.

Operating Expense

Costs necessary for maintaining the day-to-day operations of a business, excluding costs associated with the production of goods or services.