If Certain Assets Are Partially Used Up During the Accounting

question 75

Multiple Choice

If certain assets are partially used up during the accounting period,then:

• A)nothing is recorded on the financial statements until they are completely used up.
• B)a liability account is decreased and an expense is recorded.
• C)an asset account is decreased and an expense is recorded.
• D)nothing is recorded on the financial statements until they are replaced or replenished.

---

Definitions:

Debit Memorandum

An internal document sent from one department to another within a company to notify an adjustment of accounts, usually an increase in expense or a decrease in assets.

Merchandise Inventory

Refers to the goods that a company has on hand for the purpose of selling to customers.

Sales Discount

A reduction in the sale price offered by a seller to a buyer, typically to prompt early payment or reward customer loyalty.

Freight Costs

Freight costs refers to the charges involved in transporting goods by land, sea, or air. This includes the expenses associated with moving merchandise from the point of origin to its destination.