A Method That Excludes Salvage Value from the Base for the Depreciation

question 34

Multiple Choice

A method that excludes salvage value from the base for the depreciation calculation is

• A) Straight line
• B) Sum-of-the-year's digits
• C) Double-declining balance
• D) Productive output

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Definitions:

Average Cost Method

A method of inventory valuation where the cost of goods sold and ending inventory are determined by calculating the weighted average of the costs of all items available for sale.

Year-End Inventory

The total counted value of inventory that a business owns at the end of its fiscal year, which is used to calculate cost of goods sold and profitability.

Weighted Average Cost

A method of calculating the cost of inventory based on the average cost of all similar goods available during a specific period.

Inventory Balance

The total value of all the goods that a company has in stock at a particular point in time.