42、Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted.

During inflationary periods, a company's reported net income is least likely to be overstated relative to economic income if the company depreciates fixed assets using:

A. accelerated depreciation and long average lives.

B. accelerated depreciation and short average lives.

C. straight-line depreciation and long average lives.

D. straight-line depreciation and short average lives.

答案和详解如下：

42、Correct answer is B

"Analysis of Long-Lived Assets: Part II - Analysis of Depreciation and Impairment," Gerald I. White, Ashwinpaul C. Sondhi, and Dov Fried

2008 Modular Level I, Vol. 3, pp. 391-394

Study Session 9-37-a

demonstrate the different depreciation methods and explain how the choice of depreciation method affects a company's financial statements, ratios, and taxes

During inflationary periods, the difference between historic cost and replacement value becomes greater; using accelerated depreciation and short average lives will produce reported net income that is closer to economic income.

c