It Is Expected That the Service Potential of a Non-Current

question 17

Multiple Choice

It is expected that the service potential of a non-current asset will decline over time.The appropriate accounting treatment is to:

• A) Amortise the asset over its useful life.
• B) Disclose the effect in the notes to the balance sheet if it is material in nature.
• C) Write-off the asset.
• D) Accrue the difference as a payable in adjusting entries at the end of the period.
• E) None of the given answers.

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Definitions:

Money Supply

The full ledger of economic financial resources at a specific instance.

Interest Rate

The proportion of a loan charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.

Barter

The direct exchange of goods and services without the use of money as a medium of exchange.

Money

A medium of exchange that facilitates the sale, purchase, or trade of goods between parties.