The statement relating to the composite-rate depreciation approach that is not true is:

Question

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The statement that the composite-rate depreciation approach is only used for items valued at less than $500 each is not true. In fact, this approach is often used for business entities with many similar assets in the one class and involves applying a single depreciation rate to the average cost of a functional group of assets. Additionally, the composite rate is applied to the average of the beginning and ending balances in the asset account for the year, not just to assets valued at less than $500.

The Statement Relating to the Composite-Rate Depreciation Approach That Is