Question

Which of the following assets would be subject to cost recovery?

a. A painting by Picasso hanging on a physician's office wall.
b. An antique vase in a doctor's waiting room.
c. Landscaping around the doctor's office.
d. a., b., and c.
e. None of the above.

Answer 1

The correct answer is letter "C": Landscaping around the doctor's office.

Step-by-step explanation:

Cost recovery is an accounting method by which the expenses incurred in an organization -for its own benefits- is tried to be recovered. Depreciation is taken into consideration in the process but the least possible so that the return is maximized.

In that sense, only the landscaping of a doctor's office can be considered as a beneficial asset for the business.