A Business's Source Documents

question 195

Multiple Choice

A business's source documents:

• A)include the ledger.
• B)Provide objective evidence that a transaction has taken place.
• C)must be in electronic form.
• D)are prepared internally to ensure accuracy.
• E)include the chart of accounts.

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Definitions:

Sum-Of-The-Years'-Digits Depreciation

A depreciation method that results in a more accelerated write-off of an asset than straight-line depreciation, based on a sum of the years’ digits formula.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting wear and tear, decay, or decline in value over time.

Salvage Value

The estimated resale value of an asset at the end of its useful life, used in calculating depreciation expenses.

Half-Year Convention

A tax and accounting method that treats all assets acquired or disposed of during a year as being acquired or disposed at the midpoint of that year.