Which of the Following Is True

question 114

Multiple Choice

Which of the following is true?

• A) If using the double-declining-balance the total amount of depreciation expense during the life of the asset will be the highest.
• B) If using the units-of-production method, it is possible to depreciate more than the depreciable cost.
• C) If using the straight line method, the amount of depreciation expense during the first year is higher than that of the double-declining-balance.
• D) Regardless of the depreciation method, the amount of total depreciation expense during the life of the asset will be the same.

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Definitions:

Economic Value

A measure of the benefit provided by a good or service to an economic agent.

Payments

Transfers of money, or other agreed-upon medium, from one party to another in exchange for goods, services, or to fulfill a legal obligation.

Compounded Quarterly

Interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan on a quarterly basis.

Loan

A sum of money that is borrowed, usually from a financial institution or individual, which is expected to be paid back with interest.