To Achieve Effective Control Over Fixed Asset Additions, a Company

question 8

Multiple Choice

To achieve effective control over fixed asset additions, a company should establish activities that require

• A) Capitalization of the cost of fixed asset additions in excess of a specific dollar amount.
• B) Performance of recurring fixed asset maintenance work solely by maintenance department employees.
• C) Any fixed asset additions that are not used in the business to be classified as investments.
• D) Authorization and approval of major fixed asset additions.

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Definitions:

Market Demand Curve

A graphical representation showing the quantity of a good or service buyers are willing to purchase at various prices.

Perfectly Competitive

A market situation where there are many sellers and buyers, the products are homogeneous, and no single entity can influence the market price.

Perfect Competition

An industry structure in which there are many firms, each being small relative to the industry and producing virtually identical products, and in which no firm is large enough to have any control over prices.

Demand Curve

A graphical representation of the relationship between the price of a good or service and the quantity demanded by consumers.