When a Business Brings in Less Money Than It Needs

question 1

Multiple Choice

When a business brings in less money than it needs to cover expenses, it incurs a _____.

• A) deferral
• B) loss
• C) depreciation
• D) bondage

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Definitions:

AASB 116

Australian Accounting Standards Board 116 pertains to Property, Plant, and Equipment, outlining the accounting treatment for most types of property, plant, and equipment.

Depreciation Methods

These are systematic ways of allocating the cost of a tangible asset over its useful life. Examples include straight-line and declining balance methods.

Useful Lives

The period over which an asset is expected to be usable by an organization, reflecting its anticipated period of economic benefit.

Revaluation Method

An accounting technique used to adjust the carrying value of an asset to its current market value.