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.

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Definitions:

Balance Sheet

A document displaying a firm's assets, liabilities, and owners' equity at a certain moment, which serves as a foundation for calculating return rates and assessing the organization's financial structure.

Income Statement

A financial statement that reports a company's financial performance over a specific period, including revenue, expenses, and profits or losses.

Gross Margin

A financial metric indicating the difference between revenue and cost of goods sold, which is expressed as a percentage of revenue.

Balance Sheet

An account that outlines the financial position of a corporation by showing what it owns, owes, and the amount of money invested by shareholders at a given time.