An Asset's Cost Plus the Amounts You Paid for Items

question 119

Multiple Choice

An asset's cost plus the amounts you paid for items such as sales tax, freight charges, and installation and testing fees is referred to as the ________.

• A) opportunity cost
• B) sunk cost
• C) asset costing reference
• D) depreciable basis

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Definitions:

Merchantability

A warranty that goods sold will meet a minimum level of quality and will be fit for the purpose for which they are sold.

Implied Warranty

A legal assurance that goods or services meet a minimum level of quality, irrespective of whether it has been explicitly stated.

Merchantability

A warranty implied by law that goods sold by a merchant are fit for the general purpose for which they are sold.

Remedy Limitation

Restrictions or caps placed on the type or amount of compensation that can be received in a legal claim or lawsuit.