The formula for calculating depreciation expense using the double declining-balance method involves which of the following?
A)Multiplying a declining percentage by a constant book value.
B)Multiplying a constant percentage by the previous year's depreciation expense.
C)An increasing amount of depreciation expense each period.
D)Not utilizing the residual value in calculating each year's depreciation expense.

Question

Quizplus · Accepted Answer

Depreciation expense = (Cost − Accumulated depreciation)× (2 ÷ Useful life)
Because residual value is not included in the formula for the declining-balance method of computing depreciation expense,you must take extra care to ensure that an asset's book value is not depreciated beyond its residual value.

The Formula for Calculating Depreciation Expense Using the Double Declining-Balance