When an Asset Has a Defined Life,and It Is Expected

question 11

Multiple Choice

When an asset has a defined life,and it is expected that it will be used uniformly,which depreciation policy is likely to be used?

• A) sum-of-digits
• B) straight-line rate
• C) declining-balance
• D) sum-of-digits or declining-balance

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Definitions:

Accounts Receivable Turnover

A financial metric that measures how efficiently a company collects revenue from its credit customers, calculated by dividing net credit sales by average accounts receivable.

Days' Sales In Receivables

A financial ratio that measures the average number of days it takes for a company to collect payments from its credit sales.

Price-Earnings Ratio

A financial ratio that measures a company's share price relative to its earnings per share, indicating investor expectations of growth and profitability.

Management Discussion And Analysis

A section in an annual report where management provides insight and perspective on the financial results, trends, and future outlook of the company.