In Calculating Depreciation and Amortization for Tangible Assets, Physical Factors

question 25

Multiple Choice

In calculating depreciation and amortization for tangible assets, physical factors that limit service lives include all of the following except:

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

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Definitions:

Financing Activities

Transactions and events that relate to how a company finances its operations, including issuing debt, repaying loans, and issuing or buying back stock.

Net Cash Provided

The total amount of cash inflows minus cash outflows from a company's operating, financing, and investing activities.

Cash Dividends

are payments made by a company to its shareholders out of its profits or reserves, representing a portion of the company's earnings.

Indirect Method

A way to prepare a cash flow statement where net income is adjusted for changes in balance sheet accounts to calculate cash flow from operating activities.