The First Year's Depreciation for Equipment Acquired in October by a Calendar-Year

question 78

True/False

The first year's depreciation for equipment acquired in October by a calendar-year business would be based on 1½ months if it was the only asset acquired that year.

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, calculated as current assets divided by current liabilities.

Return on Assets

A profitability ratio indicating the efficiency with which a company uses its assets to generate net income, calculated by dividing net income by total assets.

Return on Equity

A financial ratio that measures the profitability of a company in relation to shareholders' equity, indicating how effectively equity supports operations and growth.

Earnings Per Share

A measure of a company's profitability calculated by dividing its net income by the number of outstanding shares of its common stock.