Read the two statements and choose the correct option.

I. Under the linear method, an asset loses the same amount of value every year.

II. Under the linear method, the book value falls by the same percentage of itself every year.

Explanation

1. 01

   I: that is why the method is called linear, or straight-line: book value against time is a straight line. True.

2. 02

   II: a fixed amount is a growing share of a shrinking book value, so the percentage rises. A fixed percentage is a different method. False.