When a Company Replaces a Component of Property, Plant and Equipment

question 55

Multiple Choice

When a company replaces a component of property, plant and equipment, which statement below does not account for one of the steps in the process?

• A) book value of the replaced component is written off to depreciation expense
• B) the asset cost of the replaced component is credited
• C) any cost to remove the old component is charged to expense
• D) the identifiable direct costs associated with the new component are capitalized

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Definitions:

ICD-10 Coding Book

A medical classification list by the World Health Organization that codes for diseases, symptoms, and procedures.

Diagnosis Codes

A system of numeric or alpha-numeric designations used in healthcare to classify and code diseases, symptoms, and procedures.

ICD-10 Codes

The tenth revision of the International Classification of Diseases, a system used globally to classify and code health conditions and related information.

Congenital Malformations

Physical anomalies or defects that are present at birth, resulting from genetic factors, environmental exposures, or unknown causes.