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Which of the following is true of the composite method?

A. The composite rate is the total annual depreciation divided by the total depreciable cost.
B. The composite life is the total depreciable cost divided by the total annual depreciation.
C. The composite life is the total cost divided by the total annual depreciation.
D. The composite rate is the total cost divided by the total annual depreciation.

1 Answer

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Final answer:

The composite method is used to calculate depreciation in accounting. The composite life is determined by dividing B) the total depreciable cost by the total annual depreciation.

Step-by-step explanation:

The composite method is used to calculate depreciation in accounting. In this method, the total depreciable cost is divided by the total annual depreciation to determine the composite life.

So, option B is the correct answer. Option A is incorrect because the composite rate is the annual depreciation divided by the depreciable cost.

Option C is incorrect because the composite life is not calculated by dividing the total cost by the total annual depreciation. Option D is also incorrect because the composite rate is not calculated by dividing the total cost by the total annual depreciation.

User Rico Herwig
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