Which Statement Best Describes the Straight-Line Method of Deprecation

question 50

Multiple Choice

Which statement best describes the straight-line method of deprecation?

• A)Depreciation is a fixed percentage of the carrying value of the asset.
• B)Depreciation is allocated equally over each year of the asset's life.
• C)Depreciation expense is greater at the beginning of the asset's life.
• D)Both A and C.

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Definitions:

Net Profit Margin Percentage

A profitability metric that calculates the percentage of net income derived from revenue, indicating how much of each dollar in revenue results in profit.

Return on Equity

A measure of financial performance calculated by dividing net income by shareholders' equity, indicating how effectively management is using a company's assets to create profits.

Gross Margin Percentage

A financial metric that represents the percentage of total sales revenue remaining after accounting for the cost of goods sold.

Return on Equity

A gauge of a business's earnings effectiveness, demonstrating the profitability produced per dollar invested by shareholders.