9
QuizMultiple Choice

Straight-Line Depreciation — Quiz

Question 9 • Advanced Financial Algebra

Which statement accurately interprets a component of straight-line depreciation?

Answer
A
The depreciation expense varies each year based on the asset's usage.
B
Book value is the amount by which the asset decreases in value each year.
C
The time period column indicates the percentage by which the asset depreciates annually.
D
Accumulated depreciation represents the total amount by which the asset has decreased in value since its purchase.

Explanation

Accumulated depreciation is the sum of all depreciation expense recorded since the asset was purchased. Under straight-line depreciation, the depreciation expense is generally the same each year, so it does not vary with usage as choice A suggests. Book value is the asset’s cost minus accumulated depreciation, not the amount it loses in one year.

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