Trainer Ltd Is Trying to Decide Whether to Change from the Reducing

question 26

Multiple Choice

Trainer Ltd is trying to decide whether to change from the reducing balance method of depreciation to the straight-line method for both accounting and tax purposes. Using the reducing balance method at the rate allowable for taxation purposes, the expense would be $1 020 000. If it changed to the straight-line method, depreciation expense would be $680 000. If the straight-line method were used instead of the reducing balance method, what would be the effect on the following?
-Changing the period of amortisation does NOT affect:

• A) net profit
• B) cash flow from operations
• C) income tax liability
• D) Amortisation expense

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Definitions:

Individualism

A social philosophy advocating for individual autonomy over the control of the collective or government.

Social Framework

The structure of societal norms, values, and institutions that shapes the interactions and behaviors of groups and individuals within a community.

Environmental Sources

Refers to the origins of natural resources and conditions in the environment that impact ecosystems and human health.

Personality Differences

Variations among individuals in regards to their characteristics, behaviors, and emotional patterns, which are influenced by genetic, environmental, and developmental factors.