Since the CCA Deducted Each Year Is a Proportion of the Undepreciated

question 1

Multiple Choice

Since the CCA deducted each year is a proportion of the undepreciated capital cost (UCC) ,UCC will gradually become ________.

• A) zero
• B) a small negative number
• C) a small positive number
• D) none of the above

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Definitions:

No Par Value

Refers to shares issued without a stated face value, with their selling price determined by the issuing company.

Stated Value

A value that is assigned to no-par value stock by the company’s board of directors, which becomes the legal capital per share of the stock.

Common Stock

A type of equity security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.

Subscriptions Receivable-Common Stock

An account that represents amounts due from subscribers who have agreed to purchase common stock of a company but have not yet paid.