The Calculation of Depreciation Using the Diminishing-Balance Method

question 123

Multiple Choice

The calculation of depreciation using the diminishing-balance method

• A)ignores residual value in determining the amount to which a constant rate is applied.
• B)multiplies a constant percentage times the previous year's depreciation expense.
• C)yields an increasing depreciation expense each period.
• D)multiplies a diminishing percentage times a constant carrying amount.

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Definitions:

Income Elasticity

A measure of how the quantity demanded of a good responds to a change in consumers' income, indicating the good's necessity or luxury status.

Price Inelastic

Price inelastic refers to a situation where the demand for a good or service is relatively unaffected by changes in its price, indicating that consumers continue to purchase the product even if its price rises or falls significantly.

Income Elasticity

A measure of how the demand for a good or service changes in response to changes in income.

Price Inelastic

Refers to a situation where demand or supply for a product is relatively unresponsive to price changes.