A Key Reason That There Are Various Acceptable Depreciation Methods

question 43

Multiple Choice

A key reason that there are various acceptable depreciation methods is

• A)different assets have different expected usage patterns.
• B)some methods are too complicated to calculate.
• C)to make it easier to calculate corporate income taxes.
• D)to account for assets with indefinite lives.

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Definitions:

Residual Value

The estimated value that an asset will have at the end of its useful life.

Depreciation Expense

An accounting method to allocate the cost of a tangible asset over its useful life.

Residual Value

The estimated salvage value of an asset at the end of its useful life.

Depreciable Cost

The original cost of an asset less its salvage value, representing the total amount that can be depreciated over its useful life.