Which of the following statements is not true? A)CCA will be the same whether a company uses the straight-line, diminishing-balance, or units-of-production method. B)Cash flow will be affected by the use of different depreciation methods. C)Over the life of the asset, total depreciation expense will be the same whether a company uses the straight-line, diminishing-balance, or units-of-production method. D)The diminishing-balance depreciation method will result in lower net income compared to the straight-line depreciation method in the early years.

Question

Quizplus · Accepted Answer

Cash flow is not affected by the use of different depreciation methods because depreciation is a non-cash expense. The choice of depreciation method only affects the allocation of the cost of an asset over its useful life, not the actual cash flows.

Which of the Following Statements Is not True