The Depreciation Method That Estimates the Number of Units of Service

question 14

Multiple Choice

The depreciation method that estimates the number of units of service or output that can be provided by an asset and allocates the depreciable cost of the asset on the basis of the use or output during each period is called the

• A) declining-balance method.
• B) sum-of-the-years'-digit method.
• C) units-of-production method.
• D) straight-line method.

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Definitions:

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenue, expenses, and net income.

Balance Sheet

A document detailing a business's financial status at a given moment, listing the company's resources, debts, and owner's equity.

Adjusting Entries

Adjusting entries are journal entries made in the accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Routine Entry

Regular, often daily, accounting entries that reflect standard business transactions.