The Straight-Line Depreciation Method and the Double-Declining-Balance Depreciation Method

question 117

Multiple Choice

The straight-line depreciation method and the double-declining-balance depreciation method:

• A)produce the same total depreciation over the asset's useful life.
• B)produce the same amount of depreciation expense each year.
• C)produce the same book value each year.
• D)are the only acceptable methods of depreciation for financial reporting.

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Definitions:

Parent

A company that controls or owns another company or companies.

Subsidiary

A company that is completely or partially owned and controlled by another company, known as the parent company.

Identifiable Asset

An asset that can be separated and sold, transferred, or licensed, and has a clear value or benefit to the business.

Amortize

The process of slowly paying off a debt through regular payments over a set period of time.