The Declining-Balance Method of Depreciation Produces

question 301

Multiple Choice

The declining-balance method of depreciation produces

• A) a decreasing depreciation expense each period.
• B) an increasing depreciation expense each period.
• C) a declining percentage rate each period.
• D) a constant amount of depreciation expense each period.

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Definitions:

Investment by Owner

The contribution of cash or other assets by an owner into their business, increasing the equity of the company.

Deficit

The amount by which expenses surpass income or revenues, resulting in a loss.

Retained Earnings

Profits that a company has reinvested in itself rather than paying out to shareholders as dividends.

Comprehensive Income

This term includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.