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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Yield Ratio

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