Any Method of Depreciation Should Be Both Systematic and Rational

question 82

True/False

Any method of depreciation should be both systematic and rational.

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Definitions:

Cash Flows from Operating Activities

The section of a company's cash flow statement that represents the amount of money a company brings in from its regular business activities.

Depreciation

The accounting method of allocating the cost of a tangible asset over its useful life, representing the asset's wear and tear, deterioration, or obsolescence.

Investing Activities

Transactions involving the purchase and sale of long-term assets and investments, recorded in the cash flow statement.

Cash Dividends

Profits distributed by a corporation to its shareholders in the form of cash.