Which One of the Following Statements Is True

question 39

Multiple Choice

Which one of the following statements is true?

• A) The activity method of computing depreciation could result in zero depreciation expense in some periods of time.
• B) If the activity method is in use, residual value should not be subtracted from cost to determine the depreciation base.
• C) The activity method produces a constant total cost of depreciation each period.
• D) The activity method should be used when the service life of the asset is affected mostly by the passage of time.

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Definitions:

Express Purposes

Express purposes are specific intentions or objectives that are explicitly stated or declared, often within the context of a legal document or agreement.

Articles of Incorporation

Legal documents filed with the government to legally document the creation of a corporation, outlining its structure, purpose, and compliance with law.

State Incorporation Statutes

Laws established by individual states that dictate how companies can legally incorporate and operate within that state.

S Corporation

A corporation that enjoys the tax status of a partnership.