Which factor is most relevant when estimating the useful life of a machine?
Correct answer: C. Expected usage and the machine's expected physical wear
- A. The number of employees in the finance department
- B. The amount of cash held by the business
- C. Expected usage and the machine's expected physical wear
- D. The market price of unrelated inventory
Explanation
Useful life depends on expected usage, physical wear, technological obsolescence and legal or contractual limits. Internal staffing, cash balances and unrelated inventory prices do not determine how long the machine provides benefits.
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About Depreciation and Non-Current Assets
Non-current assets are long-term resources recorded at cost and reduced by accumulated depreciation to show their carrying amount. Coverage includes straight-line and reducing-balance methods, residual value, useful life, depreciation adjustments, capital and revenue expenditure, and the profit or loss arising when an asset is disposed of.
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33 free Depreciation and Non-Current Assets MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
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