Which of the Following Statements Is Correct

question 55

Multiple Choice

Which of the following statements is correct?

• A)Using straight-line depreciation in comparison to an accelerated depreciation method will result in a lower reported amount of total assets at end of the first year of an asset's life.
• B)Using accelerated depreciation in the first year of an asset's life will result in a higher net income during the first year compared to using the straight-line depreciation method.
• C)Using an accelerated depreciation method will lead to a higher fixed asset turnover ratio for the first year.
• D)Using straight-line depreciation in comparison to an accelerated depreciation method will lead to a higher book value at the end of an asset's life.

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Definitions:

Debt Ratio

A financial ratio that measures the proportion of a company's total debt to its total assets, indicating the company's leverage level.

Total Assets

The combined value of a company's immediate and long-term assets.

Total Liabilities

Total liabilities represent the aggregate of all debts and financial obligations owed by an entity at a given point in time.

Processing Transactions

Processing transactions involves recording, analyzing, and managing the financial events and transactions of a company, ensuring accuracy in the financial statements.