Which of the Following Statements About MACRS Is Not Correct

question 121

Multiple Choice

Which of the following statements about MACRS is not correct?

• A)MACRS is the only accelerated depreciation method that may be used on newly acquired assets for federal income tax purposes.
• B)The method permits "depreciating" the asset to a tax basis of $0 over a specified recovery period.
• C)If a company uses MACRS in its income tax returns,it also must use MACRS in its financial statements.
• D)Most businesses would benefit from using MACRS rather than straight-line depreciation in their income tax returns.

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Definitions:

First-In, First-Out

An accounting method where the first items added to inventory are the first ones to be sold or removed, particularly relevant for cost calculation.

Equivalent Units

A concept used in process costing that represents the portion of finished units that would have been completed given the work done on incomplete units.

First-In, First-Out

An inventory valuation method that assumes goods or materials purchased first are sold or used first.

Conversion Costs

Costs incurred to convert raw materials into finished products, including direct labor costs and manufacturing overhead.