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Replacement Parts Require Replacement at Regular Intervals

Question 10

Multiple Choice

Replacement parts require replacement at regular intervals. How is the cost of replacement parts recognized?


A) As an item of PP&E and is subject to depreciation.
B) Replace parts are expensed and recognized in P&L.
C) In other accumulated income with the revaluation reserve.
D) All of the above are acceptable ways management can elect to account for replacement costs.

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