Which Statement Is FALSE

question 150

Multiple Choice

Which statement is FALSE?

• A)Depreciation is caused by the physical wear and tear of a plant asset.
• B)Depreciation is caused by obsolescence of a plant asset.
• C)Depreciation is not based on changes in the market value of a plant asset.
• D)Accumulated depreciation is a cash fund to be used to replace a plant asset when it wears out.

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Definitions:

Natural Resources

Materials or substances occurring in nature which can be exploited for economic gain, such as minerals, forests, and water.

Metal Ores

Naturally occurring solid materials from which metals can be extracted profitably.

Research And Development

Research And Development (R&D) involves investigative activities that a business conducts to improve existing products and procedures or to lead to the development of new products and procedures.

Operating Expenses

The costs associated with running the day-to-day operations of a business, such as rent, utilities, and payroll.