If Depreciation Is Zero, Then Net Domestic Product

question 34

Multiple Choice

If depreciation is zero, then net domestic product:

• A)exceeds gross domestic product.
• B)equals gross domestic product.
• C)is less than gross domestic product.
• D)cannot be defined.

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Definitions:

Direct Method

An approach to preparing the cash flow statement where actual cash flows from operating activities are listed.

Lower of Cost

An accounting rule where inventory is recorded at the lower of either its acquisition cost or market value at reporting time.

Allowance Method

An accounting technique used to estimate and account for doubtful debts, reducing accounts receivable to a realistic amount.

Direct Method

A way of presenting the cash flow statement where actual cash flows from operating activities are listed directly.