Which of the Following Is Not a Difference Between the Accounting

question 69

Multiple Choice

Which of the following is not a difference between the accounting treatment for depreciation and cost depletion?

• A) Depletion applies to natural resources while depreciation applies to plant and equipment.
• B) Depletion refers to the physical exhaustion or consumption of the asset while depreciation refers to the wear, tear, and obsolescence of the asset.
• C) Many formulas are used in computing depreciation but only one is used to any extent in computing depletion.
• D) The cost of the asset is the starting point from which computation of the amount of the periodic charge is made to operations for depreciation, but the fair value reassessed each year as the starting point for the periodic charge for depletion.

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Definitions:

Simple Linear Regression

A method in statistics that models the relationship between two variables by fitting a linear equation to the observed data.

Least-squares Regression Line

A straight line that best models the relationship between a dependent and independent variable by minimizing the sum of the squares of the vertical distances of the points from the line.

MPG

Miles Per Gallon, a measure of fuel efficiency used in the United States to indicate how many miles a vehicle can travel per gallon of fuel.

Linear Model

A mathematical model that assumes a linear relationship between the input variables (x) and a single output variable (y), where y can be calculated from a linear combination of the input variables.