In Which Amortization Method Is the First Year's Amortization Computed

question 113

Multiple Choice

In which amortization method is the first year's amortization computed by applying the amortization rate to the total cost of the asset (without reducing it for residual value) ?

• A) Sum-of-the-years'-digits
• B) Declining balance
• C) Straight-line
• D) Productive output

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Definitions:

Sum

The result of adding two or more numbers or expressions together.

Polynomials

Algebraic expressions consisting of variables and coefficients, constructed from operations of addition, subtraction, multiplication, and non-negative integer exponents of variables.

Expression

A combination of numbers, variables, operators, and sometimes parentheses that represents a value or quantity.

Decimal Notation

A way of expressing numbers that uses a decimal point to separate the whole part from the fractional part.