Which of the following should be the main determinant in the selection of the depreciation method for long-term operational assets?
A) The method that best matches the pattern of asset use.
B) The method that is most convenient to compute.
C) The method that provides the greatest return to the stockholders.
D) The method that provides the best tax advantage.

Question

Quizplus · Accepted Answer

The main determinant in the selection of the depreciation method for long-term operational assets should be the method that best matches the pattern of asset use. This ensures that the asset's cost is allocated in a way that reflects its actual use over its useful life. Convenience of computation, returns to stockholders, and tax advantages should also be considered, but they should not be the primary factors in selecting a depreciation method.

Which of the Following Should Be the Main Determinant in the Selection