A. Unstable economy
B. Rate of interest cannot be exactly determined
C. The initial deprecation is high
D. The initial depreciation is low
Related Mcqs:
- 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 - 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 - 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 - 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 - By the condition of a will, the sum of P20,000 is left to a girl to be held in trust fund by her guardian until it amounts to P50,000. When will the girl receive the money if fund invested at 8% compounded quarterly ?
A. 11.23 years
B. 11.46 years
C. 11.57 years
D. 11.87 years - 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 - What is another term for “unit method” for computing depletion ?
A. Initial cost method
B. Percentage method
C. Factor method
D. Sinking fund method
