Unless Fixed Assets Are Continually Reevaluated for Appropriateness

question 18

Multiple Choice

Unless fixed assets are continually reevaluated for appropriateness,

• A) businesses lose their competitive edge.
• B) companies must pay back earnings.
• C) equity increases.
• D) retained earnings grow.
• E) labor costs increase.

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Definitions:

Job-Order Costing

An accounting method that accumulates and assigns costs to specific jobs or batches of products.

Process Costing

A costing method used for production processes that consistently produces similar products, assigning costs to units of product based on the process they undergo.

Aluminum Refiner

A facility or process where bauxite ore is refined into aluminum, which is then used in a wide range of products and applications.

Weighted-Average Method

An inventory costing method where costs for inventory items are averaged over the period to calculate the cost of ending inventory and cost of goods sold.