When comparing the units-of-output method of depreciation with straight-line depreciation:
A)The depreciation expense in the first year will always be greater under units-of-output method.
B)The depreciation expense in the first year will always be less under the units-of-output method.
C)The depreciation expense in the first year will always be the same under both the methods.
D)The depreciation expense in the first year may be greater than,equal to,or less under the units-of-output method.

Question

Quizplus · Accepted Answer

The depreciation expense in the first year will depend on how many units are produced or how much the asset is used, which will vary from year to year. Therefore, the depreciation expense in the first year may be greater than, equal to, or less than straight-line depreciation under the units-of-output method.

When Comparing the Units-Of-Output Method of Depreciation with Straight-Line Depreciation