Which of the Following Items Are Required to Calculate Depreciation

question 45

Multiple Choice

Which of the following items are required to calculate depreciation?
I. Estimated residual value
II. Estimated useful life
III. Cost or revalued amount
IV. Method of depreciation

• A) I and III only
• B) II and III only
• C) I, II and IV only
• D) I, II, III and IV

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Definitions:

Rent

Payment made by a tenant to a landlord for the use of a property.

Depreciation

The allocation of the cost of an asset over its useful life.

EBIT

Earnings Before Interest and Taxes, a measure of a company's profitability that excludes interest and income tax expenses.

Degree of Financial Leverage

A measure of a company's use of borrowed funds to finance its operations, indicating the sensitivity of its earnings to fluctuations in operational income.