A Machine with a Five-Year Estimated Useful Life and an Estimated

question 32

Multiple Choice

A machine with a five-year estimated useful life and an estimated 10% salvage value was acquired on January 1, 2005.The depreciation expense for 2007 using the double-declining balance method would be original cost multiplied by

• A)90% × 40% × 40%.
• B)60% × 60% × 40%.
• C)90% × 60% × 40%.
• D)40% × 40%.

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Definitions:

Trial Balance

An accounting report that lists all the balances of the general ledger accounts of a company at a particular point in time to check the accuracy of bookkeeping entries.

Source Documents

Original records that provide evidence of financial transactions, such as invoices, receipts, and contracts.

Objective Evidence

Information that can be verified through empirical data, observation, measurement, and other forms of data that are not influenced by personal feelings or opinions.

Ledger

A comprehensive collection of a company's financial accounts, where transactions are recorded using a double-entry bookkeeping system.