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 obsolescence rather than time.
C) Service value declines as a function of time rather than use.
D) Physical wear and tear are more important than economic obsolescence.

Question

Quizplus · Accepted Answer

Straight-line depreciation assumes that the service value of an asset declines over time rather than as a function of obsolescence or usage. This means that the decrease in value is linear and is based solely on the passage of time, rather than any factors related to the asset's condition or usefulness.

Which of the Following Statements Is the Assumption on Which