With the half-year rule, the depreciation percentage is lower in the first year than in the second year.This is due to the fact that:
A)The depreciation percentage increases in each year
B)Assets are assumed to be acquired at mid-year
C)Depreciation expense increases at the rate of inflation
D)Declining balance depreciation is less attractive than straight-line depreciation

Question

Quizplus · Accepted Answer

The half-year rule assumes that assets are acquired at mid-year, which means they only depreciate for half of the first year. As a result, the depreciation percentage for the first year is lower than the second year to account for this. The other options are not relevant to the half-year rule.

With the Half-Year Rule, the Depreciation Percentage Is Lower in the First