Which of the Following Is Not Used in the Calculation

question 143

Multiple Choice

Which of the following is not used in the calculation of the accounting rate of return?

• A)Additional revenues generated by the investment
• B)All additional operating expenses
• C)Amount of the initial investment
• D)Present value of an annuity factor

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Definitions:

Double-Declining Balance

An accelerated method of depreciation where an asset loses value at double the rate of traditional straight-line depreciation.

Depreciation Method

An accounting technique used to allocate the cost of a tangible asset over its useful life, reflecting its consumption, wear and tear, or obsolescence.

Adjusting Journal Entries

Entries made in the accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Accumulated Depreciation

The aggregate depreciation cost that has been accounted for a particular asset since its first operational use.