With Respect to Depreciation Policies, the Principle of Consistency Means

question 157

Multiple Choice

With respect to depreciation policies, the principle of consistency means:

• A) a company should use the same depreciation methods as other companies in the same industry.
• B) a company should disclose on the financial statements the depreciation method for all its capital assets.
• C) a company should use the same depreciation method in computing depreciation expense on all its assets.
• D) a company should use the same depreciation method from year to year for a given capital asset.

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Definitions:

Test Statistic

A value calculated from sample data used to evaluate the credibility of a hypothesis about a population.

Expected Frequency

The predicted number of times an event is anticipated to occur within a specified period based on probability.

Chi-Square Test

A statistical method used to determine if there is a significant association between two categorical variables.

Expected Frequency

The predicted number of times an outcome is expected to occur in a statistical experiment based on the probabilities of all possible outcomes.