If an Entity Does Not Expect to Recover the Carrying

question 5

Multiple Choice

If an entity does not expect to recover the carrying amount of an asset, the entity has incurred:

• A) an impairment loss;
• B) a depreciation expense;
• C) an amortisation cost;
• D) a loss on disposal.

---

Definitions:

Operating Expenses

Costs associated with running the day-to-day operations of a business which are necessary to keep the business functioning, excluding the cost of goods sold.

Gross Profit

The distinction between the income from sales and the expense of goods sold prior to subtracting costs for overheads, wages, taxes, and interest.

Cost of Goods Sold

This is an accounting term that refers to the direct costs attributable to the production of the goods sold by a company.

Income from Operations

Revenue from a company's everyday business activities minus the costs and expenses associated with those operations.