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:

Limited Liability Company

A corporate framework that merges the tax benefits of a sole proprietorship or partnership with the protective limited liability found in a corporation.

Sole Proprietor

The single person at the head of a sole proprietorship.

Cooperatives

A business organization owned and operated by a group of individuals for their mutual benefit.

S Corporation

A special designation for a corporation that elects to be taxed as a pass-through entity, avoiding double taxation on the corporate income.