If too much of the cost of an asset is charged as depreciation expense in the present period, the firm's net income will be understated in later periods.

Question

Quizplus · Accepted Answer

Depreciation expense is allocated evenly over the useful life of an asset, so if too much is charged in the present period, it will reduce the amount charged in later periods, not understate net income in those periods.

If Too Much of the Cost of an Asset Is