Which of the Following Statements Is the Assumption on Which

question 8

Multiple Choice

Which of the following statements is the assumption on which straight-line depreciation is based?

• A) The operating efficiency of the asset decreases in later years.
• B) Service value declines as a function of obsolescence rather than time.
• C) Service value declines as a function of time rather than use.
• D) Physical wear and tear are more important than economic obsolescence.

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Definitions:

June

The sixth month of the year in the Gregorian calendar.

Disposable Income

The amount of money an individual or household has to spend or save after income taxes have been deducted.

Gross Monthly Income

The gross amount of earnings received in a month prior to any deductions or taxes being subtracted.

Living Expenses

costs associated with day-to-day life, such as housing, food, and transportation.