Many Companies That Use the Declining-Balance Method of Depreciation Switch

question 38

Multiple Choice

Many companies that use the declining-balance method of depreciation switch to the straight-line method at some point in the life of a depreciable asset. When does that switch normally occur?

• A) never, since one method must be applied consistently throughout the life of an asset
• B) in the last quarter of the life of the asset
• C) when the depreciation cost under the accelerated method exceeds the depreciation cost under the straight-line method
• D) midpoint in the life of the asset

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Definitions:

Mediating Variables

Factors that explain the relationship between two variables, often revealing the process or mechanism through which an effect occurs.

Path-goal Theory

A leadership theory that suggests a leader's behavior is directly related to the satisfaction, motivation, and performance of their subordinates by clarifying paths to achieve their goals.

Relations-oriented Behavior

Leadership behavior focused on building strong interpersonal relationships, fostering team cohesion, and supporting the personal needs of team members.

Task-oriented Behavior

A style of leadership or group interaction focused primarily on the accomplishment of tasks and goals.