Question

The useful life of a new plant asset _____. is the same as the asset's total productive life. might not exceed one year. might be estimated based on the experience of others or on engineering studies and judgment if the company does not have past experience with a similar asset. is determined by the IRS.

Answer 1

Answer:

The correct answer is letter "C": might be estimated based on the experience of others or on engineering studies and judgment if the company does not have past experience with a similar asset.

Explanation:

A company's assets represent the cash, patents, accounts receivable, equipment, plants, and land, among others, useful for the firm to generate profit. When it comes to plant assets, they are considered fixed assets for cost accounting purposes and are nothing but the land, buildings and machinery useful for manufacturing.

Calculating the useful life of a plant asset can be complicated and may require engineering studies. However, if the expertise of an employee is good enough to determine it the firm must take advantage of this strength but if there is nobody with this capability the institution should look for someone who does moreover when it does not have experience computing the useful life of such assets.