All of the Following Refer to the Handling of a Decline

question 39

Multiple Choice

All of the following refer to the handling of a decline in value of property,plant,and equipment except

• A) depreciation.
• B) impairment.
• C) realization principle.
• D) conservatism constraint.

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Definitions:

Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, or insurance premiums.

Variable Costs

Costs that vary directly with the level of production or sales volume, such as materials and labor.

Fixed Costs

Costs that do not change with the amount of goods or services produced, such as rent, salaries, and insurance premiums.

Depreciation

An accounting method of allocating the cost of a tangible asset over its useful life.