Asked by Grace Parker on May 16, 2024
Verified
The term,obsolescence,as it relates to the useful life of an asset,refers to:
A) The halfway point of an asset's useful life.
B) A plant asset that is becoming outdated and no longer used.
C) The inability of a company's plant assets to function as designed.
D) An asset's salvage value becoming less than its replacement cost.
E) Intangible assets that have been fully amortized.
Obsolescence
The process of an asset, product, or technology becoming outdated or no longer used, often due to advancements in technology or changes in consumer preferences.
Useful Life
The estimated duration that an asset is expected to be functional and economically feasible for use in operations, affecting depreciation calculations.
Outdated
Refers to information, technology, or methods that are no longer current, useful, or in use.
- Examine the principles of asset deficiency, obsolescence, and the determinants impacting these states.
Verified Answer
AC
Ashley CastilloMay 22, 2024
Final Answer :
B
Explanation :
Obsolescence refers to a plant asset that is becoming outdated and no longer useful or productive for the company. It can be due to technological advancements or changes in customer preferences, which make the asset less efficient or less profitable. The term does not refer to the halfway point of an asset's useful life, its inability to function as designed, or its salvage value decreasing. Intangible assets also do not become obsolete in the same way as tangible assets.
Learning Objectives
- Examine the principles of asset deficiency, obsolescence, and the determinants impacting these states.