When the sum-of-the-years'-digits method is used, depreciation expense for a given asset will
A) decline by a constant amount each year.
B) be the same each year.
C) decrease rapidly and then slowly over the life of the asset.
D) vary from year to year in relation to changes in output.

Question

Quizplus · Accepted Answer

The sum-of-the-years'-digits method results in a higher depreciation expense in the earlier years of an asset's life, followed by a decrease in the amount of depreciation expense in later years. This is because the method allocates a higher proportion of the depreciable base to the earlier years, based on a formula that adds up the digits of the asset's useful life. Therefore, the depreciation expense will decline by a constant amount each year.

When the Sum-Of-The-Years'-Digits Method Is Used, Depreciation Expense for a Given