SIE Exam Question 423: Answer and Explanation

Question: 423

Depreciation write-offs represent which of the following?

• A. An estimate of the loss in value of a tangible asset over time.
• B. An IRS mandated percentage allowable annual non-cash charge against revenues
• C. A subtraction from the computation of corporate cash flow.
• D. A tax deduction for the loss in value due to extraction or removal.

Correct Answer: B

Explanation:

B: Businesses can take advantage of annual tax-deductible write-offs according to specific schedules in the internal revenue code, referred to as depreciation schedules.