Which statement is the assumption on which straight line depreciation is based?

a$.$ The 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.

d$.$ Physical wear and tear are more important than economic obsolescence.

The straight line depreciation is not appropriate for

a$.$ An entity that is neither expanding nor contracting an investment in equipment.

b$.$ Equipment on which maintenance and repairs increase substantially with age.

c$.$ Equipment with useful life not affected by use.

d$.$ Equipment used consistently every period.

The principal objection to the straight line method of depreciation is that it

a$.$ Provides for the declining productivity of an aging asset

b$.$ Ignores variation in the rate of asset use

c$.$ Tends to result in a constant rate of return

d$.$ Gives smaller periodic writeoff than a decreasing method

In which of the following situations is the production method of depreciation most appropriate?

a$.$ An asset's service potential declines with use

b$.$ An asset's service potential declines with time

c$.$ An asset is subject to rapid obsolescence

d$.$ An asset incurs increasing repairs and maintenance

The composite depreciation method

a$.$ Is applied to a group of homogeneous assets

b$.$ Is an accelerated method of depreciation

c$.$ Does not recognize gain or loss on the retirement of single asset in the group

d$.$ Excludes residual value from the base of the depreciation calculation