Which Is NOT True of Depreciation as Found in the Pro

question 50

Multiple Choice

Which is NOT true of depreciation as found in the pro forma statement?

• A)Depreciation,unlike sales,tends to go down each year with the Modified Asset Cost Recovery System (MACRS).
• B)Unless there is a change to investments in plant,property and equipment increasing the depreciation line item,using the same percentage as that of the previous year may prove erroneous.
• C)The finance manager should keep constant the pro forma income statement to accommodate for the actual estimate of depreciation for the coming year based on the capital budget of the company.
• D)All of these statements are NOT true.

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Definitions:

Right to Dissociate

The legal ability of a partner to leave a partnership under laws governing business partnerships, potentially triggering buyout provisions or dissolution of the partnership.

Dissociate

To separate or remove oneself from an association, relationship, or partnership.

Partnership

Two or more individuals engaging in a legal business structure, where management roles and profits are shared.

Dissolution

The closing down or ending of an entity or agreement, such as the dissolution of a company or marriage.