Which of the following statements is true when the straight-line method is used to compute amortization?
A)The carrying value of an asset is a constant amount during the asset's useful life.
B)Accumulated amortization is a constant amount during the asset's estimated useful life.
C)Amortization expense per period is the amortizable cost divided by the number of periods in the asset's useful life.
D)None of the above.

Question

Quizplus · Accepted Answer

The straight-line method of amortization allocates the cost of an asset equally over its estimated useful life. Therefore, amortization expense per period is the amortizable cost divided by the number of periods in the asset's useful life. The carrying value of an asset decreases over time as its accumulated amortization increases, so option A is incorrect. Option B is incorrect because accumulated amortization increases over time until it equals the asset's cost, at which point no further amortization is recorded.

Which of the Following Statements Is True When the Straight-Line