Which statement relating to the composite-rate depreciation approach is not true?
A) A single depreciation rate is applied to the average cost of a functional group of assets.
B) It is only used for items valued at less than $500 each.
C) The composite rate is applied to the average of the beginning and ending balances in the asset account for the year.
D) It is often used in practice by business entities with many similar assets in the one class.

Question

Quizplus · Accepted Answer

The statement that the composite-rate depreciation approach is only used for items valued at less than $500 each is not true. This approach can be used for any assets with similar characteristics, regardless of their individual value.

Which Statement Relating to the Composite-Rate Depreciation Approach Is Not