Which of the Following Statements Is Correct

question 163

Multiple Choice

Which of the following statements is correct?

• A)Depreciation allocates the cost of tangible assets over their useful lives.
• B)Depreciation allocates the cost of intangible assets over their useful lives.
• C)Amortization allocates the cost of tangible assets over their useful lives.
• D)The term "depreciation" relates to all long-lived assets whereas "amortization" relates only to intangible assets.

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Definitions:

Revised Model Business Corporation Act

An influential model law that suggests legal standards and practices for the formation, operation, and dissolution of corporations in the United States.

Book Value

The net value of a company's assets minus its liabilities and preferred stock, reported on the balance sheet.

Legal Asset Distributions

The process of dividing and distributing a company's assets to shareholders, creditors, or heirs following legal rules.

Treasury Stock

Shares that were issued and subsequently reacquired by the company, hence are not considered when calculating earnings per share or dividends.