The Process of Spreading the Cost of a Fixed Asset

question 53

Multiple Choice

The process of spreading the cost of a fixed asset over the asset's useful life is called

• A) expensing.
• B) depreciation.
• C) apportioning.
• D) crediting.
• E) distributing.

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Definitions:

Raw Materials

Basic materials used in the production process, not yet transformed into finished goods.

Finished Product

Goods that have been completed through the manufacturing process and are ready to be sold.

Supply Chain

The network of all the individuals, organizations, resources, activities, and technology involved in the creation and sale of a product, from the delivery of source materials from the supplier to the manufacturer, and eventually to the end user.

Product or Service

The final output offered by a company to consumers, which can either be a tangible item (product) or an activity benefiting the customer (service).