Using the Indirect Method, Depreciation Expense for the Period

question 41

Multiple Choice

Using the indirect method, depreciation expense for the period

• A)is deducted from profit.
• B)is ignored.
• C)causes cash to decrease.
• D)is added to profit.

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Definitions:

Flat Tax Structure

A tax system with a constant marginal rate, usually applied to individual or corporate income.

Percentage

A ratio or fraction out of 100 that is used to express how large one quantity is relative to another quantity.

Marginal Rate

The rate of increase in a variable (e.g., tax rate, substitution, technical substitution) as another variable (e.g., income, quantity of another good) increases incrementally.

Increase

An upward movement in quantity, value, or some other measure, indicating growth or accumulation.