Which of the Methods Below Is a Way to Allocate

question 9

Multiple Choice

Which of the methods below is a way to allocate depreciation?

• A)The allocation each year is the amount of cost as determined by the actual estimated usage for that year.
• B)Use the government-mandated accelerated depreciation system,which depreciates the capital asset at the minimum accelerated amount allowed each year.
• C)The allocation each year is the same amount of cost as determined by the average expected operating cash inflow divided by the number of years of useful life of the machines.
• D)Use the government-mandated accelerated depreciation system,which depreciates the capital asset at the maximum accelerated amount allowed each year.

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Definitions:

Voting Shares

Shares that give the shareholder the right to vote on company matters, such as electing directors or approving acquisitions, indicating a degree of control in the company.

Retained Earnings

The portion of net income left over for the business after it has paid out dividends to its shareholders.

Carrying Amount

The book value of assets and liabilities as reported in the financial statements, factoring in depreciation, amortization, and impairment.

Voting Shares

Shares that give the shareholder the right to vote on matters of corporate policy and the selection of board members.