Which of the Following Statements Concerning the Sum-Of-The-Years'-Digits Method of Depreciation

question 8

Multiple Choice

Which of the following statements concerning the sum-of-the-years'-digits method of depreciation is correct?

• A) It is an alternative name for the reducing balance method.
• B) The depreciation charge per annum decreases over the life of the asset.
• C) It is the most common method of depreciation used in Australia.
• D) The formula is: carrying amount multiplied by remaining years of useful life.

---

Definitions:

Diminishing Marginal Returns

A principle stating that as more of a variable input is added to a fixed input, the additional output from each new unit of input will eventually decrease.

Profit-Maximizing Output

The level of production at which a firm achieves the highest possible profit, where marginal cost equals marginal revenue.

Sergei's Profit

A hypothetical measure of earnings named for an individual, illustrating the net gain after subtracting expenses from revenue.

Market Price

The ongoing transaction price for purchasing or offloading an asset or service.