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.

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Definitions:

T-Accounts

A graphical representation of a ledger account, used in accounting to show the effects of transactions on individual accounts.

Work In Process

Partially finished goods that are still in the production process, representing a component of inventory costs on the balance sheet.

T-Accounts

A visual representation of accounts in the general ledger of a company, used to understand the effects of transactions on each account.

Machine-Hours

A measure of the amount of time machines are used in the production process, often used as a basis for allocating manufacturing overhead costs.