In Calculating Depreciation and Amortization for Tangible Assets, Functional Factors

question 40

Multiple Choice

In calculating depreciation and amortization for tangible assets, functional factors that limit service lives include:

• A)ordinary wear and tear from use.
• B)chemical action such as rust.
• C)the effects of wind and rain.
• D)obsolescence.
• E)none of the above.

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Definitions:

Physical Flow of Goods

Refers to the actual movement of goods through the production process to the customer, distinct from the accounting or paper flow.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a dataset, assigning weights to each number based on its significance.

Weighted Average

A computation that considers the different levels of significance of the figures in a collection of data, giving greater emphasis to certain numbers over others.

FIFO

An inventory valuation method that assumes the first items purchased are the first items sold, standing for First-In, First-Out.