In Order for an Asset to Be Depreciated in the Year

question 26

True/False

In order for an asset to be depreciated in the year of purchase,it must be placed in service before year's end.

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Definitions:

Operating Cycle

The period from purchasing inventory to collecting cash from the sale of that inventory.

Accounts Receivable Financing

A type of financing arrangement in which a company uses its receivables as collateral for a loan, effectively selling its right to future payments in exchange for immediate cash.

Factored Receivables Financing

A financial transaction in which a business sells its accounts receivable to a third party at a discount in exchange for immediate cash.

Banker's Acceptance

A short-term financial instrument issued by a company that is guaranteed by a commercial bank, commonly used in international trade.