Which of the Following Statements About the Modified Accelerated Cost

question 53

Multiple Choice

Which of the following statements about the Modified Accelerated Cost Recovery System (MACRS) is correct?

• A)It is similar to the units-of-production depreciation method.
• B)It is applied using longer asset lives than the estimated useful lives required by GAAP.
• C)It provides a short-term tax benefit because of the higher depreciation expense reported in the early years of an asset's life.
• D)It is acceptable for use when preparing financial statements.

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Definitions:

Correlation Coefficient

A numerical measure of the strength and direction of a linear relationship between two variables.

Linear Relationship

A direct correlation between two variables that can be represented with a straight line in a graph.

Coefficient Of Determination

A statistical measure represented by R² that assesses the proportion of variance in the dependent variable predictable from the independent variables.

Correlation Coefficient

A numerical indicator that determines the magnitude of the correlation between the relative fluctuations of two variables.