Unstable Ltd Has Decided to Change Its Depreciation Method from Straight-Line

question 46

Multiple Choice

Unstable Ltd has decided to change its depreciation method from straight-line to reducing balance.As a result,its annual depreciation expense increases by $200 000.The company's income tax rate is 30 per cent.
-What is the effect on the inventory turnover ratio?

• A) It increases.
• B) It decreases.
• C) There is no effect.
• D) It cannot be determined from the information provided.

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Letter-of-credit Rights

Rights to payment under a letter of credit, which is a document from a bank guaranteeing that a seller will receive payment if certain conditions are met.

Economic Benefit

An economic benefit is a gain or advantage, usually measured in terms of money or value, received as a result of an action or transaction.

Statute of Frauds

A legal doctrine that requires certain types of contracts to be executed in writing and signed by the party to be charged.

Surety

A party that takes responsibility for another's performance of an undertaking, such as fulfilling the terms of a contract.