Depreciation Occurs When

question 98

Multiple Choice

Depreciation occurs when

• A)machines wear out.
• B)factories get old.
• C)capital is abandoned.
• D)production lines are shut down.
• E)capital is sold.

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Definitions:

Amortization Period

The length of time it takes to pay off a debt or loan in full through regular payments.

Compounded Quarterly

The process of calculating and adding interest to the principal sum of a deposit or loan every three months.

Outstanding Balance

The total amount of money that is still owed on a loan or a line of credit that has yet to be paid.

Semi-annually Compounded

A reiteration of interest calculation and addition to the principal balance every half year, facilitating growth in investments or debt.