When an Accountant Allocates the Cost of a Piece of Equipment

question 19

Multiple Choice

When an accountant allocates the cost of a piece of equipment over a period of time,this is called

• A) discounting.
• B) appreciation.
• C) cost plus.
• D) expense designation.
• E) depreciation.

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Definitions:

Acid-test Ratio

A stringent indicator of a company's ability to quickly convert its short-term assets into cash to cover short-term liabilities, excluding inventory.