The Inequality of Annual Income

question 20

Multiple Choice

The inequality of annual income

• A) cannot change from one year to the next.
• B) is about the same as the amount of lifetime inequality.
• C) cannot be compared to the amount of lifetime inequality.
• D) understates the amount of lifetime inequality.
• E) overstates the amount of lifetime inequality.

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Definitions:

Double-Declining-Balance Depreciation

A method of accelerated depreciation that applies twice the normal depreciation rate on the declining balance of an asset.

Straight-Line Depreciation

A technique for spreading the expense of a physical asset evenly across its lifespan.

Depreciation Expense

An accounting method used to allocate the cost of a tangible asset over its useful life.

Journal Entry

A journal entry in accounting is a record of a financial transaction, entering it into the accounting records of a business.