The Calculation of Depreciation Using the Declining Balance Method

question 197

Multiple Choice

The calculation of depreciation using the declining balance method

• A) ignores salvage value in determining the amount to which a constant rate is applied.
• B) multiplies a constant percentage times the previous year's depreciation expense.
• C) yields an increasing depreciation expense each period.
• D) multiplies a declining percentage times a constant book value.

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Definitions:

Inventory Purchases

The act of buying products or goods to be sold or used in the production process by a company.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company.

Sales

The transactions involving the exchange of goods or services for money, representing the primary source of revenue for most businesses.

Total Disbursements

The total amount of money paid out by a business over a set period, including expenses, investment purchases, and debt repayments.