A Truck Costs $8,000 with a Residual Value of $1,000

question 67

Multiple Choice

A truck costs $8,000 with a residual value of $1,000. The truck is expected to have a useful life of 70,000 miles. Assuming the truck is driven 15,000 miles the first year, the depreciation expense would be:

• A)$1,714
• B)$1,500
• C)$1,174
• D)$1,505
• E)None of these

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Definitions:

Instrument Due

This term refers to the date on which a financial instrument, such as a check or note, is payable.

Bearer

A person in the possession of an instrument payable to bearer or indorsed in blank.

Negotiable

Capable of being transferred or modified in terms of agreement or ownership through endorsement or delivery.

On Demand

A service or product made available whenever requested by a customer, often implying immediate or quick delivery.