With the Half-Year Rule, the Depreciation Percentage Is Lower in the First

question 62

Multiple Choice

With the half-year rule, the depreciation percentage is lower in the first year than in the second year.This is due to the fact that:

• A)The depreciation percentage increases in each year
• B)Assets are assumed to be acquired at mid-year
• C)Depreciation expense increases at the rate of inflation
• D)Declining balance depreciation is less attractive than straight-line depreciation

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Definitions:

Directors

Individuals elected by shareholders to oversee the management and govern the affairs of an organization, making strategic decisions and ensuring legal compliance.

Decision

The act or process of making choices or judgements based on available data, reasoning, and preferences.

Retained Earnings

The amount of net income left over for the business after it has paid out dividends to its shareholders.

Equity Component

A part of a compound financial instrument that represents a right to equity shares of the issuer, separate from other elements such as a debt component.