Using the straight-line depreciation method will cause a company to incur ____ tax expense in the early years of an asset's life than they would experience using an accelerated method of depreciation.
A) more
B) less
C) equal
D) no

Question

Quizplus · Accepted Answer

The straight-line method spreads the depreciation expense evenly over the useful life of the asset, which means that the tax deduction for depreciation expense will also be evenly spread over the life of the asset. This will result in lower tax deductions (and therefore, a higher tax expense) in the early years of the asset's life compared to an accelerated method of depreciation, which front-loads the tax deductions for depreciation expense.

Using the Straight-Line Depreciation Method Will Cause a Company to Incur