The Correct Statement Concerning the Diminishing-Balance Method of Depreciation Is

question 9

Multiple Choice

The correct statement concerning the diminishing-balance method of depreciation is:

• A) It is an appropriate method when proportionately more of the asset's benefits are consumed in the early years of its life.
• B) It is also known as the units-of-production method.
• C) It charges the same amount of depreciation each period.
• D) It applies a declining percentage factor to the asset's original cost.

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Definitions:

Specific Identification

A method of inventory costing that identifies and assigns the actual cost to each individual item of inventory.

High-cost Items

Products or services that have a significant purchase price or maintenance cost.

Periodic Inventory System

An inventory system where inventory levels and the cost of goods sold are updated in the accounting records periodically, often at the end of an accounting period.

Gross Profit Method

An accounting technique used to estimate the amount of inventory a company has by using the gross margin percentage.