Depreciation is based on the decline in the fair

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2. Depreciation is based on the decline in the fair market value of the asset. FALSE: Depreciation is not based on the decline in the fair market value of the asset 3. The three factors involved in the depreciation process are the depreciation base, the useful life, and the risk of obsolescence. FALSE: the 3 rd factor is method of deprecation 4. The units-of-production approach to depreciation is appropriate when depreciation is a function of time instead of activity. FALSE: It is appropriate when depreciation is a function of activity instead of time 5. Changes in estimates are handled prospectively by dividing the asset’s book value less any salvage value by the remaining estimated life. True 6. An accelerated depreciation method is appropriate when the asset’s economic usefulness is the same each year. 7. Which of the following most accurately reflects the concept of depreciation as used in accounting?
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