Which of the following statements is the assumption on which straight-line depreciation is based?
A) The operating efficiency of the asset decreases in later years.
B) Service value declines as a function of time rather than use.
C) Service value declines as a function of obsolescence rather than time.
D) Physical wear and tear are more important than economic obsolescence.

Question

Quizplus · Accepted Answer

Straight-line depreciation assumes that the service value of the asset declines as a function of time rather than use or obsolescence. This means that the asset will lose value over time regardless of how much it is used or how technologically advanced it becomes.

Which of the Following Statements Is the Assumption on Which