Change in Inventories Equals the Difference Between

question 140

Multiple Choice

Change in inventories equals the difference between

• A) production and investment.
• B) sales and investment.
• C) production and sales.
• D) investment and depreciation.

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Definitions:

Straight-Line Method

A method of calculating depreciation or amortization by evenly dividing the asset’s cost over its useful life.

Salvage Value

The estimated residual value of an asset at the end of its useful life, expected to be recovered after its use is completed.

Monthly Depreciation

The portion of an asset’s cost that is expensed each month over its useful life.

Old Plant Asset

An asset that has been in use for a considerable period and is often nearing the end of its useful life.