A Productive Asset

question 284

Multiple Choice

A productive asset:

• A)will be used up within 1 year from the balance sheet date.
• B)is the same as stockholders' equity.
• C)is part of inventory.
• D)is used to produce goods or services that will be sold to customers.

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Definitions:

Accumulated Depreciation

The total amount of a tangible asset's cost that has been expensed since the asset was put into use.

Fair Market Value

The price that a property would sell for on the open market, between a willing buyer and seller, with both parties having reasonable knowledge of the relevant facts.

Trade-In Allowance

The credit a buyer receives for a used item when exchanging it towards the purchase of a new item.

Fixed Asset Turnover Ratio

A financial metric that measures how efficiently a company uses its fixed assets to generate sales, calculated as sales divided by the average net fixed assets.