If a Firm Has Established Monitoring Devices That Have a 50

question 18

Multiple Choice

If a firm has established monitoring devices that have a 50% chance of detecting shirking,and an employee gains $5,000 from shirking,the employer can deter shirking by having employees post a bond equal to

• A) $2,500.
• B) $5,000.
• C) $10,000.
• D) $50,000.

---

Definitions:

Sum-Of-The-Years'-Digits Method

A method of accelerated depreciation calculating annual depreciation expense based on the sum of the years' digits of an asset's useful life.

Double-Declining-Balance Method

An accelerated depreciation method that expenses more of an asset’s cost closer to the beginning of its usable life.

Depreciable Asset Accounting

The accounting process that involves allocating the cost of a tangible asset over its useful life.

Depreciation Expense

The portion of the total cost of a depreciable asset that is allocated as an expense to the income statement in a given period.