Under Utility Regulatory Accounting Principles (RAP), the Account "Utility Plant

question 56

Multiple Choice

Under utility regulatory accounting principles (RAP) , the account "Utility Plant Acquisition Adjustment" reflects:

• A) The difference between the amount paid for utility plant and the amount originally paid by the utility that first placed the plant into public service, less accumulated depreciation.
• B) The difference between the fair market value of the utility plant and the amount paid for it, less accumulated depreciation.
• C) The difference between the amount paid for the utility plant less its current replacement cost.
• D) The difference between the amount paid for the utility plant less the fair market value of its tangible plant assets.

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Definitions:

Discontinued Inventory

Discontinued inventory includes products that are no longer being produced or sold by a company, often due to obsolescence or strategy shifts.

Gross Profit Margin

A profitability metric that shows the percentage of revenue that exceeds the cost of goods sold, indicating the efficiency in producing goods.

Operating Expenses

Ongoing costs for running a business that are not directly associated with creating the product or service.