When Existing Assets Are Used Up in the Ordinary Course

question 204

Multiple Choice

When existing assets are used up in the ordinary course of business:

• A)an expense is recorded.
• B)Deferred revenue is recorded.
• C)an accrual is recorded.
• D)a prepaid expense is recorded.

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Definitions:

Job-order Costing System

An accounting method that assigns costs to specific production batches or projects, tracking the direct and indirect costs involved.

Job Cost Sheet

A form that records the direct materials, direct labor, and manufacturing overhead cost charged to a job.

Direct Materials

Raw materials that can be directly associated with the manufacturing of a product and are included in the product's cost.

Schedule of Cost

A detailed report summarizing the types and amounts of costs incurred by a company during a specific period.