Which of the Following Statements Is True When the Straight-Line

question 7

Multiple Choice

Which of the following statements is true when the straight-line method is used to compute depreciation?

• A) The carrying value of an asset is a constant amount during the asset's useful life.
• B) Accumulated depreciation is a constant amount during the asset's estimated useful life.
• C) Depreciation expense per period is the depreciable cost divided by the number of periods in the asset's useful life.
• D) The book value of an asset is an increasing amount during the asset's useful life.

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Definitions:

Mark-up

An extra charge on top of the cost price for items, aimed at covering both overhead expenses and profits, described in terms of a percentage of the initial cost.

Profit or Loss

The financial result of operations, where profit is the excess of revenues over expenses and loss is the deficit.

Annual Sale

A sale event that occurs once a year, often featuring significant discounts on goods and services.

Discount

The reduction applied to the usual cost of goods, services, or securities.