Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

Which statement is true about additions to plant assets?

Additions to plant assets are capitalized and increase the asset's book value.

Additions to plant assets decrease the accumulated depreciation of the asset.

Additions to plant assets have no impact on the financial statements.

Additions to plant assets are always expensed in the period incurred.

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Verified step by step guidance

Understand the concept of 'additions to plant assets': Additions refer to expenditures made to enhance or expand the capacity, efficiency, or useful life of an existing plant asset. These are typically capitalized rather than expensed.

Clarify the term 'capitalized': Capitalizing means recording the expenditure as an asset on the balance sheet rather than as an expense on the income statement. This increases the book value of the asset and spreads the cost over its useful life through depreciation.

Evaluate the impact on accumulated depreciation: Additions to plant assets do not directly decrease accumulated depreciation. Instead, they may extend the useful life or increase the value of the asset, which could affect future depreciation calculations.

Analyze the financial statement impact: Additions to plant assets are capitalized, meaning they increase the asset's book value on the balance sheet. They do not have an immediate impact on the income statement unless they are incorrectly expensed.

Review the incorrect options: Additions are not always expensed in the period incurred, nor do they have no impact on financial statements. The correct statement is that additions are capitalized and increase the asset's book value.