Which of the Following Statements About Depreciation Is Correct

question 106

Multiple Choice

Which of the following statements about depreciation is correct?

• A)depreciation is subtracted from cost of goods sold to calculate net income.
• B)when depreciation expense is incurred, cash balances are reduced.
• C)depreciation expense does not affect net income.
• D)depreciation reduces the book value of assets.

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Definitions:

Secondary Meaning

occurs when a descriptive term or phrase used in connection with a product or service becomes closely associated with that product or service in the minds of consumers.

Trademark Misappropriated

Unlawful use of another’s trademark or service mark without permission, leading to confusion or deception.

Company

A legal entity formed by a group of individuals to engage in and operate a business—commercial or industrial—enterprise.

Collective Mark

A trademark or service mark used by members of a collective group to identify the services or goods they provide with a certain level of quality or accuracy.