Which of the Following Statements Is True with Regard to Depreciation

question 110

Multiple Choice

Which of the following statements is true with regard to depreciation expense?

• A) Different companies in the same industry always depreciate similar assets by the same methods.
• B) A company using straight-line will show a smaller book value for assets than if the same company uses double-declining-balance.
• C) Choosing double-declining-balance over straight-line will produce a greater total depreciation expense over the asset's life.
• D) Although their opinions may differ, managers should choose the allocation method (straight-line, accelerated, or units-of-production) that best matches expenses with revenues.

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Definitions:

Security Deposits

Funds held by a landlord or lender as a guarantee against damage or non-payment, to be returned or applied to future payments if conditions are met.

Federal Law

Legislation passed by the United States Congress that applies throughout the country, overriding state laws when there is a conflict.

Fair Housing Act

U.S. federal law that prohibits discrimination in the buying, selling, renting, or financing of housing based on race, religion, national origin, sex, disability, and family status.

Prospective Tenant

A person or entity that may potentially enter into a lease agreement to rent a property.