Rock Crushers Limited Produces Smaller Rocks from Larger Rocks

question 114

Multiple Choice

Rock Crushers Limited produces smaller rocks from larger rocks.As part of the production process, Rock Crusher Limited takes the below listed actions.Which is a capital investment?

• A)Covering the payroll for their rock crushing technicians.
• B)Purchasing large rocks and crushing them into smaller rocks.
• C)Storing suitably crushed rock for future sales.
• D)Making interest payments on their bonds.

---

Definitions:

Bad Debts Expense

An estimated expense that reports the cost of accounts receivable that a company does not expect to collect.

Aging

The process of categorizing accounts receivables based on the length of time an invoice has been outstanding to determine their collectability.

Accounts Receivable

An asset account representing money owed to a business by its customers for goods or services delivered on credit.

Allowance for Doubtful Accounts

A contra-account reducing accounts receivable to reflect the estimated portion that may not be collected.