Future Business Leaders of America (FBLA) Agribusiness Practice Test

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Enhance your FBLA Agribusiness knowledge with our comprehensive test. Dive into flashcards and multiple-choice questions, complete with hints and explanations, to ensure exam success. Prepare confidently for a bright future!

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Which of the following is an example of a systematic depreciation method?

Last-in, first-out
Straight-line method
Market value method
Cost-plus pricing

The correct answer is: Straight-line method

The straight-line method is a systematic depreciation method because it allocates the cost of an asset evenly over its useful life. By using this approach, businesses can easily predict their expenses related to asset depreciation, making financial planning and reporting more straightforward. Each accounting period recognizes the same depreciation expense, which simplifies the accounting process and helps maintain consistency in financial statements. This method is widely used due to its simplicity and the ease of understanding, allowing businesses to allocate costs in a clear and predictable manner. Other methods, such as the declining balance method or units of production method, also exist but vary in how they allocate costs and do not represent systematic depreciation in the same way the straight-line method does.