Which Depreciation Method Does NOT Use the Current Book Value

question 55

Multiple Choice

Which depreciation method does NOT use the current book value in calculating depreciation expense?

• A) Straight-line
• B) Double declining-balance
• C) Units-of-production
• D) Both A and C

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Definitions:

User Cost

The cost associated with using a capital asset, considering both the depreciation of the asset and the foregone interest that could have been earned by investing funds elsewhere.

Nonrenewable Resource

A natural resource that cannot be replenished at the same rate at which it is consumed.

Future

A term referring to events that have not yet occurred or financial contracts regarding assets to be delivered or transacted at a later date.

User Cost

The opportunity cost of using a durable good or natural resource, factoring in depreciation and the forgone interest that could have been earned if the money was invested elsewhere.