The Main Reason for Using the Midpoint Method Is That

question 2

Multiple Choice

The main reason for using the midpoint method is that it:

• A)gives the same answer regardless of the direction of change
• B)uses fewer numbers
• C)rounds prices to the nearest dollar
• D)rounds quantities to the nearest whole unit

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Definitions:

Double Diminishing-Balance

An accelerated method of depreciation that doubles the depreciation rate of the diminishing balance method, expensing a larger portion of the asset's cost near the beginning of its life.

Residual Value

The anticipated value of an asset at the conclusion of its lifespan.

Double Diminishing-Balance

An accelerated method of depreciation that calculates expense by doubling the straight-line depreciation rate applied to the declining book value of an asset.

Depreciation Expense

The allocated reduction in the value of a tangible asset over its useful life, recognized as an expense on the income statement.