For Which of the Following Products Would Trend Extension Probably

question 52

Multiple Choice

For which of the following products would trend extension probably be MOST suitable for sales forecasting?

• A) Cars
• B) Equipment used to produce microcomputers
• C) Snow skis
• D) Industrial pollution control equipment
• E) Margarine

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Definitions:

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life evenly, resulting in a consistent expense charge over each period.

Double-Declining-Balance Depreciation

A method of accelerated depreciation in which an asset's book value is reduced at double the rate of its straight-line depreciation.

Retrospective Approach

The retrospective approach in accounting involves restating past financial statements as if a new accounting policy had been in effect in those periods, to provide consistency in financial reporting.

Depreciation Rate

The percentage or method used annually to allocate the cost of a tangible asset over its useful life, reflecting its consumption, wear and tear, or obsolescence.