Which of the Following Depreciation Methods Best Fits Those Assets

question 91

Multiple Choice

Which of the following depreciation methods best fits those assets that tend to wear out before they become obsolete?

• A)Depletion method
• B)Double- declining- balance method
• C)Units- of- production method
• D)Straight- line method

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Definitions:

Periodic Inventory System

A method of inventory management where updates to inventory levels are made at specific intervals, typically at the end of an accounting period, rather than continuously.

Inventory Shipped on Consignment

Goods sent by a vendor (consignor) to a consignee, which are held by the consignee until sold; the consignor retains ownership until the goods are sold.

Consignee

The individual or entity that is legally permitted to receive goods but does not have ownership rights over the cargo until the consignment is paid for or sold.

LIFO Cost Flow Assumption

A method in accounting that assumes the last items of inventory purchased are the first ones sold.