Where an Asset Is Measured Using the Cost Model,any Impairment

question 42

Multiple Choice

Where an asset is measured using the cost model,any impairment loss is:

• A)debited to the retained earnings account.
• B)debited to the depreciation expense account.
• C)credited to the asset account.
• D)credited to the accumulated depreciation and impairment losses account.

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Definitions:

External Costs

Costs that are not borne by the parties involved in an economic transaction, often affecting third parties who did not choose to incur that cost.

Marginal Cost

The charge for producing one more unit of a product or service.

Marginal Benefit

Marginal benefit is the additional satisfaction or value a consumer derives from consuming one more unit of a good or service.

Inadequate Information

A situation where the available data is insufficient or missing, leading to uncertainty in decision-making or analysis.