A. Unit method
B. Percentage method
C. Factor method
D. Sinking fund method
Related Mcqs:
- 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 - The Saudi Arabian Oil Refinery developed an oil well which is estimated to contain 5,000,000 barrels of oil at an initial cost of $ 50,000,000. What is the depletion charge during the year where it produces half million barrels of oil? Use Unit or Factor method in computing depletion?
A. $ 5,000,000.00
B. $ 5,010,000.00
C. $ 5,025,000.00
D. $ 5,050,000.00 - Shell Philippines, a multinational company, has a total gross income for a particular year of P 50,000,000. The taxable income after taking all deductions except for depletion is P 18,500,000. What is the allowable depletion allowance for that particular year? Take percentage of gross income for oil as 22%?
A. P 9,358.41
B. P 9,228.45
C. P 9,250.00
D. P 9,308.45 - What is another term for “unit method” for computing depletion ?
A. Initial cost method
B. Percentage method
C. Factor method
D. Sinking fund method - What are the common methods of computing depletion charge ?
A. Rational method and irrational method
B. Conservative method and conventional method
C. Unit method and percentage method
D. Discrete method and depletion allowance method - In what method of computing depreciation where it assumes that the loss in value is directly proportional to the age of the equipment or asset ?
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 - 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 - 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 - Using factor method, the depletion at any given year is equal to ?
A. Initial cost of property times number of unit sold during the year divided by the total units in property
B. Initial cost of property divided by the number of units sold during the year
C. Initial cost of property times number of units sold during the year
D. Initial cost of property divided by the total units in property
