Question

A presumption that improvements depreciate at an equal rate each year until the end of their economic lives, when a structure would be torn down. Also called the straight-line method.

A. Accretion
B. Devise
C. Capitalization
D. Absorption

Answer 1

The correct answer is D. Absorption. The given statement describes the straight-line method of depreciation, where improvements are presumed to depreciate at an equal rate each year until the end of their economic lives.

Step-by-step explanation:

The correct answer is D. Absorption. The given statement describes the straight-line method of depreciation, where improvements are presumed to depreciate at an equal rate each year until the end of their economic lives.

This method is used to allocate the cost or value of an asset over its useful life.

For example, if a structure has an economic life of 10 years, the straight-line method assumes that it will depreciate by 1/10th of its value each year.