Inadequacy refers to:
A) The insufficient capacity of a company's property, plant and equipment to meet the company's growing production demands.
B) An asset that is worn out.
C) An asset that is no longer useful in producing goods and services.
D) The condition where the residual value is too small to replace the asset.
E) The condition where the asset's residual value is less than its cost.

Question

Quizplus · Accepted Answer

Inadequacy refers to the situation where a company's property, plant, and equipment do not have sufficient capacity to meet the company's growing production demands. This is different from assets being worn out or no longer useful, which would relate to depreciation or obsolescence.

Inadequacy Refers To