Which of the Following Statements Is True

question 44

Multiple Choice

Which of the following statements is true?

• A)The entry to record depreciation expense involves a credit to a liability.
• B)The entry to record depreciation expense involves a credit to a contra-asset.
• C)The entry to record depreciation expense involves a credit to the asset being depreciated.
• D)The entry to record depreciation expense involves a credit to depreciation expense.

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Definitions:

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of materials and labor.

Investment Turnover

A ratio that measures the efficiency of a company in using its investments to generate sales revenue, reflecting how effectively assets are being utilized.

Operating Income

The amount of profit realized from a business's operations after deducting operating expenses like wages, depreciation, and cost of goods sold.

Invested Assets

Items acquired or bought with the intention of earning income or profit.