Pre-SFAC No

question 38

Multiple Choice

Pre-SFAC No. 8, the three components of reliability are:

• A) Predictive value, feedback value, timeliness.
• B) Verifiability, neutrality, representational faithfulness.
• C) Verifiability, predictive value, feedback value.
• D) Relevance, comparability, materiality.

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Definitions:

Depreciation Expense

Spreading out the expense of a solid asset over the period it's expected to be used.

Units-Of-Production Method

An accounting method of depreciation that allocates cost based on the actual usage or production levels of the asset.

Depreciation Expense

An accounting method used to allocate the cost of a tangible asset over its useful life.

Machine Hours

A measure of the operating time of a machine, used in costing and budgeting to allocate expenses based on usage.