early in the fiscal year, the beanery purchases a delivery vehicle for $40,000. at the end of the year, the…

early in the fiscal year, the beanery purchases a delivery vehicle for $40,000. at the end of the year, the vehicle has a fair value of $33,000. the company controller reports depreciation expense of $7,000 for the year, the decline in the vehicles value. is the company controllers approach to reporting depreciation expense correct? multiple choice yes no

early in the fiscal year, the beanery purchases a delivery vehicle for $40,000. at the end of the year, the vehicle has a fair value of $33,000. the company controller reports depreciation expense of $7,000 for the year, the decline in the vehicles value. is the company controllers approach to reporting depreciation expense correct? multiple choice yes no

Answer

Brief Explanations:

Depreciation is calculated based on systematic and rational allocation of the cost of an asset over its useful - life, not based on fair - value decline. The controller's approach of using the decline in fair value as depreciation expense is incorrect.

Answer:

B. No