Under the depletion allowance method in computing depreciation, the depletion charge is equal to either ______ whichever is smaller.

A Fixed percentage of gross income or the net taxable income
B Fixed percentage of gross income or 50% of the net taxable income
C 50% of the fixed percentage of gross income or 50% of the net taxable income
D 50% of the fixed percentage of gross income or the net taxable income

Correct Answer: Fixed percentage of gross income or 50% of the net taxable income

Bissoy MCQ
#Civil Engineering #Engineering Economics

Related Questions

The depletion allowance method of computing depletion is commonly known as ______.
A Unit method
B Percentage method
C Factor method
D Sinking fund method
রেওয়ামিলে দেনাদার ৫২,০০০ টাকা, লিখিত অনাদারি পাওনা ২,০০০ টাকা এবং অলিখিত অন্যদায়ি পাওনা ২,০০০ টাকা। যদি দেনাদারের ওপর ৫% সঞ্চিতি রাখা হয় এবং অনাদায়ি পাওনা সঞ্চিতির ক্রেডিট ব্যালেন্স ১,০০০ টাকা হয়, তাহলে চলতি বছরে অন্যনায়ি পাওনা সঞ্চিতি কত রাখতে হবে? (In trial balance, account receivable is of Tk. 52,000 recorded bad debt of Tk.2,000 and unrecorded bad debt of Tk. 2,000. What is the amount of allowance for doubtful accounts kept in current year if the allowance is 5% on accounts receivable and credit balance in allowance for doubtful accounts currently is of Tk. 1,000 )
A ২,৫০০ টাকা (Tk. 2,500)
B ১,০০০ টাকা (Tk. 1,000)
C ২,৪০০ টাকা (Tk. 2,400)
D 1,500 টাকা (Tk. 1,500)
In what method of computing depreciation where it assumes that the annual cost of depreciation is a fixed percentage of the book value at the beginning of the year?
A Straight line method
B Sinking fund method
C Sum-of-year digit method
D Declining balance method
Rashna Company collected the following data in its accounting records in 2014 : From the income statement : Depreciation expense Tk. 1,000 Loss on sale of equipment 3,000 From the comparative balance sheet : Beginning balance , equipment Tk. 12,500 Ending balance , equipment 8,000 Beginning balance , accumulated depreciation 2,000 Ending balance , accumulated depreciation 2,400 No new equipment was purchased during the year. The equipment was sold at the end of the year. What was the cash in -flow from the sale of equipment in 2014?
A Tk, 3,900
B Tk. 1,000
C Tk. 900
D Tk. 600
A company owns some land and buildings for which the following details are relevant : Cost of land Taka 50,000; cost of building Taka 100,000, estimated life of building 20 years, estimated residual value of building Taka 2000; estimated residual value of land Taka 50,000. The company uses the straight line depreciation method. Which is the correct annual depreciation charge for this asset?
A Taka 4000
B Taka 4900
C Taka 7400
D Taka 7500
Under which depreciation method, the amount of depreciation expenses remains same throughtout the life of the asset?
A Straight line method
B Reducing balance method
C Number of units produced method
D Machine hours method
Under which method of depreciation, the amount of depreciation expenses remains constant throughout the life of the asset?
A Reducing balance method
B Unit of activity method
C Straight line method
D None of these
অবচয়ের কোন পদ্ধতি প্রথম বছরের অবচয় সবচেয়ে কম দেখাবে? (Which depreciation method shows the lowest amount of depreciation in the first year?)
A সরলরৈখিক পদ্ধতি (Straight line method )
B ক্রমহ্রাসমান পদ্ধতি (Declining balance method)
C বর্ষ সংখ্যার সমষ্টি পদ্ধতি (Sum of the years digit method)
D উৎপাদন একক (Units of production)
The depreciation during the year 'n', in diminishing balance method of depreciation calculation, is calculated by multiplying a fixed percentage 'N' to the
A Initial cost
B Book value at the end of (n - 1)th year
C Depreciation during the (n - 1)th year
D Difference between initial cost and salvage value
Annual depreciation costs are constant, when the __________ method of depreciation calculation is used.
A Declining balance
B Straight line
C Sum of the years digit
D None of these

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