A Multiple Is Needed to Use the Declining Balance Method

question 4

Multiple Choice

A multiple is needed to use the declining balance method of depreciation.How is the multiple chosen?

• A) All around the world,the choice is completely open.
• B) In every country,the tax authorities have defined,for each class of assets,a standardized multiple.
• C) The multiple is always equal to two.
• D) The selection of the multiple varies greatly from country to country.

---

Definitions:

Finished Goods

Products that have completed the manufacturing process and are ready to be sold to customers.

Work In Process

Partially finished goods that are in various stages of production in a manufacturing company's inventory.

Direct Materials

Raw materials that are directly traceable and contribute to the finished product in a manufacturing process.

Total Cost

The complete sum of all expenses incurred in producing a product or delivering a service, including both fixed and variable costs.