Each of the statements appearing below is descriptive of one or more of the following depreciation methods. Make a list numbered 1 - 5 and place the Roman Numeral(s) belonging to the method(s) to which the statement best applies. A method could be used once, more than once or not at all.

 

I.   Component                           

 

II.  Declining-balance                 

 

III. Straight-line

 

IV. Sum-of-the-years'-digits

 

V.  Units-of-production

 

_____ 1.  The depreciation charged by this method decreases by the same amount each year.

 

_____ 2.  This method is used if each part of a plant asset is significant to the asset's total cost.

 

_____ 3.  The method allocates larger shares of the cost of a plant asset to expense during the years in which the greatest use is made of the asset.

 

_____ 4.  The method always allocates larger shares of the cost of a plant asset to expense during the earlier years of its life.

 

_____ 5.  Once the depreciable base, residual value, and life of a plant asset are determined, the annual charges to operations under this method will be the same.