Explain the Increased-Risk Test

question 21

Essay

Explain the increased-risk test.

Understand the accounting treatment for the acquisition and depreciation of property, plant, and equipment (PPE).

Identify plant assets and differentiate them from intangible assets.

Apply the units-of-production depreciation method and calculate accumulated depreciation.

Understand the difference between capital expenditures (betterments) and revenue expenditures (repairs).

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Definitions:

Group Polarization

The tendency for a group's prevailing attitudes or beliefs to become more extreme after discussing them as a group.

Social Facilitation

Improvement in an individual’s performance because of the presence of others.

Solomon Asch

A psychologist best known for his research on group conformity and social pressure influencing individuals' judgments and perceptions.

Conformity

A change in a person’s behavior to coincide more closely with a group standard.