If the Client Fails to Record Disposals of Property, Plant

question 69

Multiple Choice

If the client fails to record disposals of property, plant, and equipment, both the original cost of the asset account and the net book value will be incorrect.

• A) The original cost will be overstated indefinitely, and the net book value will be overstated until the asset is fully depreciated.
• B) The original cost will be overstated indefinitely, and the net book value will be understated until the asset is fully depreciated.
• C) Both will be overstated indefinitely.
• D) The original cost will be overstated indefinitely, and the net book value will be understated indefinitely.

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Definitions:

American Economy

The economic system of the United States, characterized by private enterprise, a variety of industries, and a complex financial market.

New Deal

A series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States during the 1930s in response to the Great Depression.

Global Economic Crisis

A period of worldwide financial instability, which can lead to a downturn in the global economy affecting multiple countries and economies.

Adolf Hitler

The leader of the National Socialist German Workers' Party (Nazi Party), whose fascist policies led to World War II and the genocide of millions, known as the Holocaust.