Choose the Statement About Depreciation That Is Correct

question 10

Multiple Choice

Choose the statement about depreciation that is correct.

• A)Yearly depreciation will always be higher using the straight-line method.
• B)At the end of the asset's useful life, total depreciation charged will be the same whichever depreciation method is used.
• C)Yearly depreciation will always be lower using the units of use method.
• D)Yearly depreciation will always be higher using the reducing-balance method.

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Definitions:

Stock Option Plan

A compensation strategy used by companies to grant employees the right to purchase company shares at a predetermined price after a specified period.

Compensation Expense

The total cost incurred by a business to pay its employees, including wages, benefits, bonuses, and taxes.

Common Stock

Equity ownership in a corporation, with voting rights and the potential for dividends, representing a claim on a portion of the company's assets and earnings.

Fair Value

The estimated market value of an asset, based on current prices in an open and competitive market.