Which of the Following Statements About Depreciation Is Correct

question 15

Multiple Choice

Which of the following statements about depreciation is correct?

• A)The depreciation method selected has no impact on cash flows.
• B)The depreciation method selected has no impact on net income.
• C)Consistency requires that the same method of depreciation should be used for all classes of assets.
• D)Straight-line depreciation produces higher depreciation expense in the early years of an asset's useful life.

---

Definitions:

Treasury Stock

Shares that were issued and subsequently reacquired by the issuing company, reducing the amount of outstanding stock on the open market.

Income Statement

A financial statement that reports a company's revenues, expenses, and net income over a specific period, indicating financial performance.

Accounts Receivable

Money owed to a business by its customers for goods or services that have been delivered but not yet paid for.

Cash Received

The total amount of cash received by a company during a specific period from all its activities, including operations, investments, and financing.