ABC Company Experienced an Accounting Event That Affected Its Financial

question 29

Multiple Choice

ABC Company experienced an accounting event that affected its financial statements as indicated below: Which of the following accounting events could have caused these effects on ABC's financial statements?

• A) earned revenue on account
• B) purchased equipment on account
• C) provided services to customers for cash
• D) recognized accrued salaries owed to employees

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Definitions:

Plant Asset

A long-term tangible asset held for manufacturing, production, or supply of goods and services, such as machinery and buildings.

Contribution To Revenue

The portion of sales revenue that is not consumed by variable costs and contributes to covering fixed costs.

Double-Declining-Balance

A method of accelerated depreciation where an asset's book value is reduced at double the rate of traditional straight-line depreciation.

Book Value

The net value of an asset, calculated as the original cost minus accumulated depreciation, depletion, or amortization.