Which of the Following Should Be the Main Determinant for Selection

question 99

Multiple Choice

Which of the following should be the main determinant for selection of the allocation method for long-term operational assets?

• A)The method that is most convenient to compute.
• B)The method that best matches the pattern of asset use.
• C)The method that provides the greatest return to the stockholders.
• D)The method that provides the best tax advantage.

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Definitions:

On Account

A term indicating that a purchase has been made or services have been ordered with payment to be made at a later date, typically used in accrual accounting.

Calendar Year

A period of 365 days—or 366 days in a leap year—starting from January 1st to December 31st, used for financial and administrative purposes.

Interim Financial Statement

Interim financial statements are financial reports covering a period of less than a full fiscal year, providing a more immediate view of financial health.

Capital

Refers to financial assets or the financial value of assets, such as cash and goods, used by a business to fund its operations and growth.