Which of the Following Statements Is True When the Straight-Line

question 82

Multiple Choice

Which of the following statements is true when the straight-line method is used to compute depreciation?

• A)The carrying value of an asset is a constant amount during the asset's useful life.
• B)Accumulated depreciation is a constant amount during the asset's estimated useful life.
• C)Depreciation expense per period is the depreciable cost divided by the number of periods in the asset's useful life.
• D)None of the answers are acceptable.

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Definitions:

Purchase Discount

A reduction in the price of goods that a buyer can avail of for making early payments to the seller.

Sales Discount

A reduction in the price of goods or services offered to a customer, typically used to incentivize prompt payment.

Discount

The interest deducted from the maturity value of a note or the excess of the face amount of bonds over their issue price.

Credit Terms

Conditions under which credit is granted by a lender to a borrower, including repayment period, interest rate, and other clauses.