Style 11. Under which method(s) of depreciation is the residual value of a depreciated asset may not Be taken into account to determine annual depreciation expense? a. Straight-line method b. Declining balance method c. Units-of-production method d. Straight-line and Units-of-production methods e. All of the above 12. Which of the following regarding the lower of cost or market rule for I inventory are true? (1) The lower of cost or market rule is an example of the historical cost principle. (2) When the market value (net realizable value) of inventory drops below the cost shown in the financial records, net income is not affected. (3) When the market value (net realizable value) of inventory drops below the cost shown in the financial records, total assets (total net book value) are reduced. a. (1) b. (2) c. (3) d. (1) and (3) e. All of the three