Question

Graphically the ________ of an asset can be determined by drawing a straight line between its first cost and its salvage value when using the straight-line depreciation method.

a. Depreciation expense
b. Book value
c. Accumulated depreciation
d. Salvage value

Answer 1

The b. book value of an asset using the straight-line depreciation method is graphically depicted as a straight line from the first cost to the salvage value, with each point on the line representing the book value for a given year.

Step-by-step explanation:

Graphically, the book value of an asset can be determined by drawing a straight line between its first cost and its salvage value when using the straight-line depreciation method. The straight-line method assumes an equal amount of depreciation expense each year over the asset's useful life. This method creates a linear depreciation pattern, so the graphic representation is a straight line. At any point in time, the book value of the asset is represented on the graph by the point on the straight line corresponding to that year.