Discounts Available for Early Payment of Liabilities on Purchases of Capital

question 7

Multiple Choice

Discounts available for early payment of liabilities on purchases of capital assets should:

• A) be capitalized as a part of the cost of the asset, whether taken or not, and subsequently included as amortization expense.
• B) be recorded and reported as a contra account to the related liability account.
• C) not be capitalized as cost of the asset whether taken or not.
• D) be given no recognition until taken or until the discount period has expired: if not taken, the discounts should be added to the cost of the asset.

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Definitions:

Nipples

Specialized body structures located on the chest that can secrete milk in females and are present in both sexes without milk-producing function in males.

Preeclampsia

A pregnancy complication characterized by high blood pressure and signs of damage to another organ system, most often the liver and kidneys.

Proteinuria

The presence of abnormal amounts of protein in the urine, which can be a sign of kidney disease.

Edema

Swelling caused by excess fluid trapped in the body's tissues.