Which of the following is not true about straight-line deprecaition? Question 37 options: Straight-line depreciation requires...

Which of the following is not true about straight-line deprecaition? Question 37 options: Straight-line depreciation requires the s

imples data and calculations. Straight-line depreciation assumes equal productivity each period. Straight-line depreciation is the most common depreciation method used by companies. Straight-line depreciation ignores the salvage value of an asset.

Solutions

Expert Solution

Correct answer:

Correct option(4) or Straight-line depreciation ignores the salvage value of an asset is correct answer because this not true about straight-line depreciation. Straight-line depreciation considers the salvage value of an asset while calculating the amount of depreciation.

Straight-line depreciation method, Depreciation p.a = (Cost - Salvage Value) / Useful Life

So Straight-line depreciation considers the salvage value of an asset and does not ignore the salvage value of an asset.

Incorrect answers:

Option(1) or Straight-line depreciation requires the simple data and calculations is incorrect answer because this is true statement that simple data and calculations are done in straight-line depreciation method.

Option(2) or Straight-line depreciation assumes equal productivity each period is incorrect answer because under this method the amount of depreciation remain same every year.

Option (3) or Straight-line depreciation is the most common depreciation method used by companies is incorrect answer because this method is commonly used by the companies as it is easy to use and understandable.

So correct answer is option (4)

ekkarill92 answered 1 year ago

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