If Certain Assets Are Partially Used Up During the Accounting

question 75

Multiple Choice

If certain assets are partially used up during the accounting period,then:

• A)nothing is recorded on the financial statements until they are completely used up.
• B)a liability account is decreased and an expense is recorded.
• C)an asset account is decreased and an expense is recorded.
• D)nothing is recorded on the financial statements until they are replaced or replenished.

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold or consumed within one year or within the operating cycle of a business, whichever is longer.

Intangible Assets

Non-physical assets that have value, such as patents, trademarks, and copyrights, known for their long-term benefits to a company.

Gain on Sale

The profit recognized when an asset is sold for more than its carrying amount.

Other Revenue

Income that a business earns from activities not related to its primary operations, such as investment income or rental income.