Which of the Following Are Correct

question 15

Multiple Choice

Which of the following are correct?
I. If a company uses straight-line depreciation for financial reporting purposes, it is very likely they have a deferred tax liability with respect to its depreciable assets.
II. Straight line depreciation yields an increasing rate of return on book value over the life of asset.
III. Straight line depreciation results in lower tax payments than accelerated depreciation methods over the life of an asset.
IV. If a company revises its estimate of the useful life of an asset upwards this will decrease annual depreciation expense.

• A) I, II, III and IV
• B) I, II and IV
• C) I, II and III
• D) I and IV

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Definitions:

United Nations

An international organization formed in 1945 to promote peace, security, and cooperation among the world's nations.

Food and Agriculture Organization

An agency of the United Nations that leads international efforts to defeat hunger and improve nutrition and food security.

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The decline of a fishery to a point where it can no longer sustain a viable fishing activity, often due to overfishing, pollution, or habitat destruction.