The term inadequacy, as it relates to the useful life of an asset, refers to:
A) An asset that is no longer useful in producing goods and services.
B) The condition where the asset's salvage value is less than its cost.
C) The insufficient capacity of a company's plant assets to meet the company's growing production demands.
D) An asset that is worn out.
E) The condition where the salvage value is too small to replace the asset.

Question

Quizplus · Accepted Answer

Inadequacy refers to the situation where a company's plant assets cannot meet the growing production demands, indicating insufficient capacity.

The Term Inadequacy, as It Relates to the Useful Life