MB-310 Manage Fixed Assets Practice Question
A company is setting up a new fixed asset value model for office furniture. The company wants to use the straight-line depreciation method over a useful life of 10 years. The asset will be acquired on January 1 for USD 12,000. The company uses a calendar year fiscal period. What will be the annual depreciation expense for this asset?
⚠ Common exam trap
Test-takers frequently confuse monthly and annual depreciation amounts, or incorrectly using a different useful life than the one specified.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
USD 1,200
The straight-line depreciation method allocates the depreciable basis evenly over the useful life of the asset. With an acquisition cost of USD 12,000, no salvage value, and a useful life of 10 years, the annual depreciation is USD 12,000 / 10 = USD 1,200. The system will post this amount each year, assuming a full year of depreciation in the first year, depending on the depreciation convention.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
USD 2,400
Why it's wrong here
This amount is double the correct annual depreciation, which would be the case if the useful life were 5 years. The scenario specifies 10 years. Using 5 years would overstate the annual expense. The straight-line method is straightforward: acquisition cost divided by useful life. The system does not automatically halve the life unless configured to do so.
- ✓
USD 1,200
Why this is correct
The straight-line method divides the depreciable basis (acquisition cost minus salvage value) by the useful life in years. Assuming no salvage value, the depreciable basis is USD 12,000. Dividing by 10 years yields USD 1,200 per year. This is the annual depreciation expense recorded each year for 10 years, resulting in full depreciation by the end of the useful life.
- ✗
USD 1,000
Why it's wrong here
This amount would result if the useful life were 12 years instead of 10. The scenario clearly states a useful life of 10 years. Using 12 years would understate the annual depreciation. The system calculates depreciation based on the useful life defined in the value model, so with 10 years, the correct amount is higher.
- ✗
USD 100
Why it's wrong here
This amount is one-tenth of the correct annual depreciation, which would be the monthly depreciation if the annual amount were USD 1,200. However, the question asks for the annual depreciation expense. The system calculates monthly depreciation and posts it periodically, but the annual total is USD 1,200. Confusing monthly and annual amounts is a common error.
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Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official Microsoft exam blueprint
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