1) Activity method of depreciation:
A. Is variable charge approach.
B. Suppose that depreciation is a function of the passage of time.
C. Conceptually associates cost in terms of input measures.
D. All of these.
2) For income statement purposes, depreciation is variable expense if depreciation method used is:
A. Units-of-production.
B. Straight-line.
C. Sum-of-the-years'-digits.
D. Declining-balance.
3) Use of double-declining-balance method:
A. Results in decreasing charge to depreciation expense.
B. Means salvage value is not reduced in computing depreciation base.
C. Means book value must not be reduced below salvage value.
D. All of these.
4) Use of sum-of-the-years'-digits method:
A. Results in salvage value being ignored.
B. Means the denominator is years remaining at beginning of year.
C. Means the book value must not be reduced below salvage value.
D. All of these.
5) Graph is set up with "yearly depreciation expense" on the vertical axis and "time" on horizontal axis. Suppose linear relationships, how would graphs for straight-line and sum-of-the-years'-digits depreciation, respectively, be drawn?
A. Vertically and sloping down to right
B. Vertically and sloping up to right
C. Horizontally and sloping down to right
D. Horizontally and sloping up to right