6. Which of the following statements correct? 1- The purpose of depreciation is to have the balance sheet report the current value of a fixed asset. II - When an entity purchases real estate consisting of a 10 - hectare parcel of land and a building, the entity will depreciate the cost over the useful life of the building. III - A number of companies may depreciate the same model computer over a period of three years, while another may do so over a period of five years, and both are correct. IV - Depreciation on units of property, plant and equipment that are reserved or standby should not be continued. V- Accelerated depreciation methods lead to higher depreciation over time (1 Point) ) I only IV only III only II only Vonly

## Step1: Analyze Statement I<br />### Depreciation does not aim to report the current value of a fixed asset on the balance sheet. Instead, it allocates the cost of the asset over its useful life.<br />## Step2: Analyze Statement II<br />### When purchasing real estate with land and building, only the building is depreciated over its useful life; land is not depreciated.<br />## Step3: Analyze Statement III<br />### Different companies can use different depreciation periods for the same type of asset based on their policies and both can be correct.<br />## Step4: Analyze Statement IV<br />### Depreciation should continue even if the property, plant, and equipment are reserved or on standby.<br />## Step5: Analyze Statement V<br />### Accelerated depreciation methods result in higher depreciation expenses in the earlier years of an asset's life.