Inventories and Other Physical Assets Should Be

question 18

Multiple Choice

Inventories and other physical assets should be:

• A) received and counted by the department which initially ordered it.
• B) placed in service as soon as received to maximize profit.
• C) received in a central receiving department before being routed to their destination.
• D) reconciled and paid for prior to being routed to their destination.

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Definitions:

Revaluation Model

An accounting method that allows for the upward or downward adjustment in the carrying amount of an asset to its current fair value, provided it can be measured reliably.

Revaluation Increment

An increase in the book value of an asset to reflect its fair value, often recognized during asset revaluation processes.

Depreciation Charges

Expenses recorded to allocate the cost of tangible assets over their useful lives, reflecting wear and tear, deterioration, or obsolescence.