The Apportionment of the Cost of a Wasting Asset to Future

question 90

Multiple Choice

The apportionment of the cost of a wasting asset to future periods under the matching principle is

• A)depletion.
• B)amortization.
• C)depreciation.
• D)allocation.

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Definitions:

WACC

Weighted Average Cost of Capital; a calculation of a firm's cost of capital in which each category of capital is proportionately weighted, representing the average cost of funding from all sources.

Pure Play

A company that focuses on a specific industry or product segment without diversification into other areas.

Capital Structure

The combination of borrowing and ownership funds that a business employs to finance its activities and expansion.

Financing

The act of providing funds for business activities, making purchases or investing.