Which of the Following Statements Concerning Fixed Assets Is Not

question 12

Multiple Choice

Which of the following statements concerning fixed assets is not true?

• A) knowledge of the approximate average age of fixed assets can be useful in assessing the efficiency of the assets.
• B) knowledge of the approximate average age of fixed assets can be useful in deciding whether the assets may need to be replaced in the near future.
• C) knowledge of the approximate average age of fixed assets can be calculated by the formula accumulated depreciation divided by average recorded cost of fixed assets.
• D) knowledge of the approximate average age of fixed assets can be useful in deciding whether the asset register is up-to-date.

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Definitions:

Fixed Cost

Costs that remain constant in total, regardless of changes in the level of production or sales volume, such as rent, salaries, and insurance.

Budgeted Fixed Expenses

Estimated costs that do not change with the level of activity within a certain range and time period.

Inventory Purchases

The total cost of buying raw materials and goods for sale during a specific accounting period.

Collection Pattern

A specific sequence or method used to collect data, payments, or resources, often used in accounting or project management.