When the Future Benefits of Existing Assets Are Used Up

question 73

Multiple Choice

When the future benefits of existing assets are used up in the ordinary course of business:

• A)an expense is recorded.
• B)a loss is recorded.
• C)a credit to a liability is recorded.
• D)a debit to assets is recorded.

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Definitions:

Automobile

A wheeled motor vehicle used for transportation, typically powered by an internal combustion engine or electric motor.

Title

The ownership of the goods.

Construction Lien

A legal claim against a property by a contractor or subcontractor who has not been paid for work performed or materials supplied in improving that property.

Building Contract

A legal agreement between a property owner and a contractor outlining the construction or renovation of a building, including terms like scope of work, payment, and timelines.