All of the Following Factors in Computing Depreciation Are Estimates

question 54

Multiple Choice

All of the following factors in computing depreciation are estimates except

• A) cost.
• B) residual value.
• C) salvage value.
• D) useful life.

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Definitions:

Retained Earnings

The part of a company's earnings that is not distributed as dividends to its shareholders but is instead reinvested or saved.

Dividend Cut

A reduction in the dividend amount paid by a corporation to its shareholders, often due to financial difficulties or the need to conserve cash.

Bird in the Hand Theory

A theory that suggests investors prefer the certainty of dividend payments to the possibility of much higher future capital gains.

Dividend Distribution

The method by which a corporation's earnings are distributed among its shareholders in the form of dividends.