Which Factor Has Removed Most of the Practical Limitations Associated

question 117

Multiple Choice

Which factor has removed most of the practical limitations associated with use of the perpetual inventory system?

• A)A more honest work force.
• B)Recent changes in GAAP.
• C)Advancements in technology.
• D)Recent changes in federal and state laws.

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Definitions:

Retained Earnings

The portion of net income that is not distributed to shareholders but instead reinvested in the business or used to pay off debt.

Fixed Assets

Fixed Assets are long-term tangible property that a firm owns and uses in its operations to generate income, such as machinery, buildings, and equipment.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value due to wear and tear, decay, or obsolescence.

Current Asset

An asset that is expected to be converted into cash, sold, or consumed within one year or within the operating cycle of the business.