The Depreciable Cost of an Asset Using Straight Line Depreciation

question 142

Multiple Choice

The depreciable cost of an asset using straight line depreciation is defined as:

• A)cost minus accumulated depreciation.
• B)cost minus salvage value.
• C)current sales value minus historical cost.
• D)cost minus annual maintenance expense.

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Definitions:

Net Income

The amount of money that remains after all operating expenses, taxes, and costs have been subtracted from total revenues.

Net Sales

Revenue from sales reduced by customer discounts, returns, and allowances.

Held-to-Maturity Debt Securities

Financial instruments that a firm intends and is able to hold until they mature, usually recorded at cost adjusted for amortization.

Equity Securities

Financial instruments that represent ownership interest in a company, such as stocks, granting holders a claim on part of the company's assets and earnings.