Which of the Following Entries Is an Example of Asset

question 34

Multiple Choice

Which of the following entries is an example of asset consumption recognised over future time periods?

• A) Dr Warranty expense Cr Warranty liability
• B) Dr Supplies expense Cr Supplies inventory
• C) Dr Customer deposits Cr Service revenue
• D) None of the answers provided

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Definitions:

Average Operating Assets

The average value of the assets used in the normal operation of a business to generate revenue, calculated typically over a fiscal year.

Net Operating Income

A measure of a company's profitability by subtracting operating expenses from its operating revenues.

Minimum Required Rate

The lowest return on investment deemed acceptable by an investor or manager, often used in capital budgeting to evaluate potential projects.

Investment Opportunity

An asset or item that offers the potential for profit or income, either through capital appreciation or earnings.