Present depreciation methods
A) are based on replacement costs.
B) are based on historic costs
C) are required to use the capital consumption adjustment.
D) always overstate earnings.

Question

Quizplus · Accepted Answer

Depreciation methods are based on historic costs, which represent the initial cost of an asset when it was acquired. Replacement costs are not used in depreciation methods. Although the capital consumption adjustment is a factor to consider in certain types of depreciation, it is not always required. Depreciation does not always overstate earnings, as it is a way to allocate the cost of an asset over its useful life, which can help to accurately reflect the true economic costs of using that asset.

Present Depreciation Methods