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

question 17

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,
-which of the following is NOT affected?

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

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Definitions:

Density Function

A mathematical function that describes the probability distribution of a continuous random variable, indicating how the total probability is distributed over the various possible values the variable can take.

Symmetric

A characteristic of shapes, equations, or other entities that remain unchanged when reflected, rotated, or transformed in specific ways.

Tails

The ends of a distribution curve, referring to the extreme values far from the mean in a probability distribution.

Mean

The arithmetic average of a set of numbers, calculated by dividing the sum of the values by the number of values.