The Observation That Additions to Fixed Assets Are Lumpier Than

question 101

Multiple Choice

The observation that additions to fixed assets are lumpier than additions to current assets indicates that:

• A) fixed assets depreciate over time.
• B) fixed assets can be acquired only through external funding.
• C) current assets can be acquired in smaller increments.
• D) dollar for dollar, fixed assets are more expensive than current assets.

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Definitions:

Overtime Pay

Additional compensation provided to employees for hours worked beyond their standard working hours.

Federal and State Income Tax

Taxes imposed by the federal and state governments on taxable income earned by individuals and corporations.

Federal Insurance Contributions Act

A U.S. law that mandates a payroll tax on the paychecks of employees, as well as contributions from employers, to fund the Social Security and Medicare programs.

Cumulative Gross Earnings

The total gross income earned by an individual or entity before any deductions over a given period.