Which Method of Depreciation Is Not Acceptable for Financial Accounting

question 109

Multiple Choice

Which method of depreciation is not acceptable for financial accounting purposes?

• A) the modified accelerated cost recovery system (MACRS)
• B) the sum-of-the-years'-digits method
• C) the declining-balance method
• D) the straight-line method

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Definitions:

Operating Expenses

The ongoing costs for running a business, excluding the cost of goods sold, such as rent, utilities, and salaries.

Sales Revenues

The gross revenue is the entire sum of money earned from selling goods or providing services prior to subtracting any expenses or costs.

Imputed Interest Rate

The calculated interest rate used in situations where no actual interest rate is specified or when understanding the opportunity cost of an investment.

Residual Income

The amount of income that exceeds the minimum rate of return expected from a particular investment. It is often used as a measure of the performance of an investment or a division within a company.