Which of the Following Statements About the End of an Asset's

question 267

Multiple Choice

Which of the following statements about the end of an asset's life is correct?

• A)At the end of an asset's life,its book value should equal its depreciable cost.
• B)At the end of an asset's life,the Accumulated Depreciation should equal the residual value.
• C)Assets are depreciated below residual value only when the double-declining balance method is used.
• D)At the end of an asset's life,the book value would equal zero if there is no residual value.

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Definitions:

Contractionary Monetary Policy

A monetary policy strategy used by central banks to reduce inflation and cool an overheated economy by raising interest rates or increasing reserve requirements.

Inflation

The frequency at which the all-encompassing costs of goods and services heighten, eroding financial purchasing capability.

Unemployment Rate

The percentage of the labor force that is jobless and actively looking for work.

Phillips Curve

An economic concept that depicts an inverse relationship between the rate of unemployment and the rate of inflation.