A write-down in asset value is:
A)a very rare occurrence.
B)not allowed under GAAP.
C)results in a direct debit to stockholders' equity.
D)required if an asset is deemed to have permanent impairment of value.

Question

Quizplus · Accepted Answer

A write-down in asset value is required if an asset is deemed to have permanent impairment of value. This is a common occurrence in accounting and is allowed under GAAP. It results in a direct debit to the asset account and a credit to an allowance account or an expense account, which ultimately reduces the asset's value on the balance sheet.

A Write-Down in Asset Value Is