The Straight-Line Depreciation Method

question 178

Multiple Choice

The straight-line depreciation method:

• A)reports an equal amount of depreciation expense each year.
• B)reports a higher amount of depreciation expense in the early years of an asset's use.
• C)reports more depreciation expense in a year when an asset is heavily used and less in a year when the asset is hardly used at all.
• D)can be used only by small companies.

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Definitions:

Market Equilibrium

A condition or state where the supply of a good matches its demand, leading to a stable market price for the good.

Good

A tangible product or item that satisfies some human desire or need, often available for sale in the market.

Tax Revenue

Government income collected from citizens and businesses through imposed levies and duties.

Tax

A mandatory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.