Which Method Does Not Deduct Residual Value in Calculating Depreciation

question 19

Multiple Choice

Which method does not deduct residual value in calculating depreciation expense?

• A)Straight-line method
• B)Units-of-production method
• C)Declining-balance method
• D)None of these
• E)None of these.

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Definitions:

Preferred Stock

A class of ownership in a corporation with a higher claim on assets and earnings than common stock, often paying fixed dividends.

Callable Preferred Stock

A type of preferred stock that gives the issuer the right to redeem the stock at a predetermined price after a certain date.

Convertible Preferred Stock

A type of preferred stock that gives the holder the option to convert it into a specified number of common stock shares, usually at any time after a predetermined date.

Cumulative Preferred Stock

A type of preferred stock where dividends accrue if not paid as scheduled, ensuring holders receive dividends in arrears before common stockholders get any.