Which of the Statements Below Is FALSE

question 33

Multiple Choice

Which of the statements below is FALSE?

• A)Under the modified accelerated cost recovery system (MACRS)system of depreciation,the government classifies all assets into groups that are assigned specific "lives" for the purpose of depreciation.
• B)Under the modified accelerated cost recovery system (MACRS)system of depreciation,once the assigned class life is established,an adjustable percentage of the cost is expensed each year as depreciation.
• C)Under the modified accelerated cost recovery system (MACRS)system of depreciation,it can be assumed that an asset's assigned life class is the shortest allowable recovery period for allocating the capital expenditure costs and reducing taxes.
• D)Depreciation or "expired" costs each year do not reflect cash flows because the actual purchase and installation (outflow of dollars)of the machines have already taken place.

---

Definitions:

Expiratory Reserve Volume (ERV)

The additional air that can be forcibly exhaled after the completion of a normal, passive exhalation.

Vital Capacity (VC)

The maximum amount of air a person can expel from the lungs after a maximum inhalation, a measure of lung function.

Inspiratory Reserve Volume (IRV)

The additional amount of air that can be inhaled after a normal inhalation, contributing to total lung capacity.

Expiratory Capacity (EC)

The maximum volume of air that can be exhaled from the lungs after a normal tidal volume exhalation.