Use of the Sum-Of-The-Years'-Digits Method

question 71

Multiple Choice

Use of the sum-of-the-years'-digits method

• A)results in salvage value being ignored.
• B)means the denominator is the years remaining at the beginning of the year.
• C)means the book value should not be reduced below salvage value.
• D)all of these.

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Definitions:

Bond Issuance

The process of selling bonds to investors in order to raise capital.

Investing Activities

Financial actions that involve the purchase or sale of long-term assets and other investments not considered cash equivalents.

Repaying Money

The process of returning borrowed funds to the lender along with any agreed upon interest or fees.

Collecting Cash

The process of receiving cash, usually from customers, as payment for goods or services or as repayment of obligations.