The Basic Financial Statements Are Listed Below

question 29

Multiple Choice

The basic financial statements are listed below:
(1) Balance sheet
(2) Statement of retained earnings
(3) Income statement
(4) Statement of cash flows
In which of the following sequences does the accountant ordinarily prepare the statements?

• A)1, 4, 3, 2
• B)2, 1, 3, 4
• C)3, 2, 1, 4
• D)3, 2, 4, 1

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Definitions:

Depreciation Expense

Allocating the expense of a physical asset in a structured manner throughout its service life.

Double-Declining Balance Method

The Double-Declining Balance Method is an accelerated depreciation technique that doubles the rate of straight-line depreciation to allocate a asset's cost more quickly.

Activity Method

A depreciation technique that allocates the cost of an asset over its useful life based on its level of activity, such as units produced or hours used.

Sum-Of-The-Years'-Digits Method

A depreciation technique that accelerates the expense recognition, basing the calculation on a fraction of the sum of the years’ digits of the asset’s life.