Which of the Following Would Not Be Allowed a Depreciation

question 81

Multiple Choice

Which of the following would not be allowed a depreciation deduction?
I.Inventory.
II.Business equipment.
III.Land acquired as an investment.
IV.Cattle used in a dairy herd.
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• A)Only statement I is correct.
• B)Statements I and III are correct.
• C)Statements I, III and IV are correct.
• D)Only statement IV is correct.
• E)All of the assets are depreciable.

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Definitions:

Predetermined Overhead Rate

A rate used to apply manufacturing overhead to products or job orders, calculated by dividing estimated overhead costs by an allocation base like direct labor hours.

Machine-Hours

The total hours that machines are operated in the production process, used as a basis for allocating manufacturing overhead to products.

Cost Of Goods Sold

The total cost directly involved in producing goods or services sold during a specific period.

Predetermined Overhead Rate

A rate calculated before a period begins, used to apply overhead costs to products based on a certain activity such as labor hours or machine hours.