Which of the Following Is a Correct Statement About Asset

question 187

Multiple Choice

Which of the following is a correct statement about asset impairment?

• A) An asset is impaired if the net book value exceeds the estimated future cash flows.
• B) If an asset is impaired, the future cash flows will be less than the fair value.
• C) Under GAAP, an asset that has been written down because of impairment can be written back up if it increases in value in the future.
• D) If an asset is impaired, the impairment loss is the difference between the net book value and the fair value.

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Definitions:

Ethics

A set of moral principles that govern the behavior of individuals or organizations and guide decision-making and conduct.

Stakeholders

Stakeholders are individuals, groups, or organizations that have an interest in the performance and actions of a company, which can include shareholders, employees, customers, and suppliers.

Conflicts of Interest

Situations where an individual's or entity’s obligations to multiple parties could compromise the decision-making or actions taken, typically due to a clash between personal and professional interests.

Accounting Profit

The net income of a company as calculated by subtracting total expenses from total revenue, according to accounting rules.