A. Straight line method
B. Sinking fund method
C. Sum-of-year digit method
D. Declining balance method
Related Mcqs:
- In what method of computing depreciation where it assumes that the annual cost of depreciation is a fixed percentage of the book value at the beginning of the year ?
A. Straight line method
B. Sinking fund method
C. Sum-of-year digit method
D. Declining balance method - In what method of computing depreciation where it assumes that a sinking fund is established in which funds will accumulate for replacement purposes ?
A. Straight line method
B. Sinking fund method
C. Sum-of-year digit method
D. Declining balance method - ABC Corporation makes it a policy that for any new equipment purchased, the annual depreciation cost should not exceed 20% of the first cost at any time with no salvage value. Determine the length of service life necessary if the depreciation used is the SYD method ?
A. 7 eyars
B. 8 years
C. 9 years
D. 10 years - In computing depreciation of an equipment, which of the following represents the first cost ?
A. The original purchase price and freight charges
B. Installation expenses
C. Initial taxes and permit fees
D. All of the above - What do you call the after-tax present worth of all depreciation effects over the depreciation period of the asset ?
A. Asset recovery
B. Depreciation recovery
C. Period recovery
D. After-tax recovery - Under the depletion allowance method in computing depreciation, the depletion charge is equal to either ________________ which ever is smaller ?
A. Fixed percentage of gross income or the net taxable income
B. Fixed percentage of gross income or 50% of the net taxable income
C. 50% of the fixed percentage of gross income or 50% of the net taxable income
D. 50% of the fixed percentage of gross income or the net taxable income - What is the main reason why the sinking fund method of computing depreciation is seldom used in the industry ?
A. Unstable economy
B. Rate of interest cannot be exactly determined
C. The initial deprecation is high
D. The initial depreciation is low - What type of depreciation is due to the reduction in the demand for the function that the equipment or asset was designed to render ?
A. Functional depreciation
B. Design depreciation
C. Physical depreciation
D. Demand depreciation - What type of depreciation is due to the reduction of the physical ability of an equipment or asset to produce results ?
A. Functional depreciation
B. Design depreciation
C. Physical depreciation
D. Demand depreciation - As applied to capitalized asset, the distribution of the initial cost by a periodic changes to operation as in depreciation or the reduction of a debt by either periodic or irregular prearranged programs is called ___________________?
A. Annuity
B. Amortization
C. Capital recovery
D. Annuity factor
