Which of the Following Statements Is FALSE

question 152

Multiple Choice

Which of the following statements is FALSE?

• A)As an asset is used in operations, accumulated depreciation increases.
• B)As an asset is used in operations, the book value of the asset decreases.
• C)As an asset is used in operations, the book value of the asset increases.
• D)An asset's final book value is its residual value.

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Definitions:

Economic Benefits

The advantages or gains received from actions or decisions made in terms of increased income, cost savings, or improved financial health.

Present Obligations

Current commitments arising from past events, expected to lead to an outflow of resources embodying economic benefits.

Past Transactions

Financial activities or deals that have been completed in the past, impacting the financial position of a business.

Direct Method

A cash flow statement approach that lists major categories of gross cash receipts and payments, providing a clearer view of a company's cash flow from operational activities.