Which of the Statements Below Is FALSE

question 33

Multiple Choice

Which of the statements below is FALSE?

• A)Under the modified accelerated cost recovery system (MACRS)system of depreciation,the government classifies all assets into groups that are assigned specific "lives" for the purpose of depreciation.
• B)Under the modified accelerated cost recovery system (MACRS)system of depreciation,once the assigned class life is established,an adjustable percentage of the cost is expensed each year as depreciation.
• C)Under the modified accelerated cost recovery system (MACRS)system of depreciation,it can be assumed that an asset's assigned life class is the shortest allowable recovery period for allocating the capital expenditure costs and reducing taxes.
• D)Depreciation or "expired" costs each year do not reflect cash flows because the actual purchase and installation (outflow of dollars)of the machines have already taken place.

---

Definitions:

Equity Income

Income that comes from owning shares in a company, typically in the form of dividends paid out from the company's profits.

Internal Accounting Records

Documentation and books kept by an organization for its internal financial planning, monitoring, and reporting.

Consolidated Balance Sheet

A financial statement that combines the assets, liabilities, and shareholders' equity of a parent company and its subsidiaries into one document.

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account column totals that are equal.