Under What Conditions Will the Service Hours and Productive Output

question 103

Multiple Choice

Under what conditions will the service hours and productive output methods of amortization result in the same amortization expense for a particular year?

• A) When the total estimated service hours and production in units are the same.
• B) When the ratio of actual service hours to productive output for the year is the same as the ratio of the estimates used in their respective amortization rates.
• C) When salvage value is zero.
• D) The two methods cannot produce the same amortization expense amount for any given year.

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