Which of the Following Statements Is Not Correct with Respect

question 80

Multiple Choice

Which of the following statements is not correct with respect to an asset with a five-year life owned by a company that uses straight-line depreciation and the half-year convention?

• A)It will have the same depreciation expense in the first and last years.
• B)It will be depreciated over six accounting years.
• C)It will have a book value that exceeds its salvage value at the end of its economic life.
• D)It will have a smaller depreciation expense in Year 4 than it does in Year 2.

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Definitions:

Monthly Deposits

Regular payments or investments made into a particular account or scheme every month.

Investment

The action or process of investing money for profit or material result.

Compounded Semi-Annually

An interest calculation method where interest is added to the principal balance twice a year, leading to more interest accrued over time than if compounded once a year.

Monthly Payments

These are payments made once a month, as in a loan or lease, towards reducing the outstanding balance owed.