Which Statement Relating to the Composite-Rate Depreciation Approach Is Not

question 26

Multiple Choice

Which statement relating to the composite-rate depreciation approach is not true?

• A) A single depreciation rate is applied to the average cost of a functional group of assets.
• B) It is only used for items valued at less than $500 each.
• C) The composite rate is applied to the average of the beginning and ending balances in the asset account for the year.
• D) It is often used in practice by business entities with many similar assets in the one class.

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Definitions:

Opinions

Personal beliefs or judgments that are not necessarily based on fact or knowledge, reflecting individual perspectives.

Self-Serving Bias

A common human tendency to attribute positive events to one's own character but attribute negative events to external factors.

Internal Attributions

The process of ascribing the cause of one's own or others' behavior to personal traits, dispositions, or abilities, rather than to external factors.

External Attributions

The process of inferring that a person's behavior is due to situational factors, rather than aspects of the individual themselves.