How many of these statements are true of the composite rate depreciation approach?
$\bullet$The general asset mix of a functional group of assets is assumed to be the same through new assets are added and old assets are sold.
$\bullet$Additions and retirements are assumed to occur uniformly throughout the year.
$\bullet$The method is often used by business entities with many similar assets in one class.
$\bullet$Profits and losses on disposal of assets are debited/credited to the accumulated depreciation account so no losses or profits on disposal are recorded.
A) 1
B) 2
C) 3
D) 4

Question

Quizplus · Accepted Answer

All four statements accurately describe aspects of the composite rate depreciation approach. This method assumes a consistent asset mix, treats additions and retirements as occurring uniformly, is used for entities with many similar assets, and handles profits and losses on disposal by adjusting the accumulated depreciation account, avoiding the recording of gains or losses on disposal.

How Many of These Statements Are True of the Composite ∙\bullet∙

How Many of These Statements Are True of the Composite $\bullet$