A Manufacturer of Plastic Bottles for the Medical Trade Purchases

question 69

Multiple Choice

A manufacturer of plastic bottles for the medical trade purchases a new compression blow molder for its bottle production plant. How will the cost to the company of this piece of equipment be recorded?

• A) It will be depreciated over time on the income statement and subtracted as a capital expenditure on the statement of cash flows.
• B) It will be depreciated over time on the income statement and subtracted as Inventory on the statement of cash flows.
• C) It will be depreciated over time on the income statement and therefore not be recorded separately on the statement of cash flows.
• D) It will be subtracted from Gross Profit on the income statement and therefore, not be recorded separately on the statement of cash flows.

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Definitions:

Persuasiveness of Advertisement

The ability of an advertising message to convince or influence viewers to take a specific action or adopt a particular viewpoint.

Own Conclusions

Personal judgments or decisions made after considering the information or evidence at hand.

Increases Persuasiveness

Enhancing the ability to convince others to agree with an argument, viewpoint, or request.

Distraction in Persuasion

The use of unrelated stimuli to divert attention during persuasion to potentially increase susceptibility to the message.