Which of the Following Best Describes the Nature of Discontinued

question 76

Multiple Choice

Which of the following best describes the nature of discontinued assets?

• A)Impairment testing based on most likely sale or disposal price.
• B)Impairment testing only if plants are closed or equipment is not used.
• C)Lower of cost or market impairments,including an allowance for obsolescence.
• D)Estimates and assumptions made in preparation of the estimate of income tax expense for the year.

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Definitions:

Allowances

Amounts set aside for adjustments or reductions in the value of accounts or inventories, often for potential bad debts or depreciation.

Withheld

Refers to amounts deducted from an employee's wages or payments, often pertaining to taxes or other legal obligations, not immediately paid to the employee.

Interstate Commerce

A test that is applied to determine whether an employer must follow the rules of the Fair Labor Standards Act. If an employer communicates or does business with another business in some other state, it is usually considered to be involved in interstate commerce.

FICA

FICA refers to the Federal Insurance Contributions Act, which is a U.S. law that requires a payroll tax to fund Social Security and Medicare programs.