23. A principal objection to the straight-line method of depreciation is that it A) tends to result in a constant rate of return on a diminishing investment base. B) gives smaller periodic write-offs than decreasing charge methods. C) ignores variations in the rate of asset use. D) provides for the declining productivity of an aging asset.

23. A principal objection to the straight-line method of depreciation is that it A) tends to result in a constant rate of return on a diminishing investment base. B) gives smaller periodic write-offs than decreasing charge methods. C) ignores variations in the rate of asset use. D) provides for the declining productivity of an aging asset.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 5C: The following two statements concern depreciation: 1. Because our plant was shut down for part of...

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

23. A principal objection to the straight-line method of depreciation is that it

A) tends to result in a constant rate of return on a diminishing investment base.

B) gives smaller periodic write-offs than decreasing charge methods.

C) ignores variations in the rate of asset use.

D) provides for the declining productivity of an aging asset.

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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