Which of the following statements is true with regard to depreciation expense?
A)Different companies in the same industry always depreciate similar assets by the same methods.
B)A company using straight line will show a smaller book value for assets than if the same company uses double declining balance.
C)Choosing double declining balance over straight line will produce a greater total depreciation expense over the asset's life.
D)A company should use the depreciation method that best matches expense recognition with the use of the asset.

Question

Quizplus · Accepted Answer

It is important for a company to use the depreciation method that best matches the expense recognition with the use of the asset. This ensures that the company accurately reflects the decrease in the value of the asset over time and matches the depreciation expense with the revenue generated by the asset. Different companies in the same industry may use different depreciation methods, and choosing one method over another can result in different book values and total depreciation expenses for the asset. Therefore, it is important for a company to choose the depreciation method that is most appropriate for its specific situation.

Which of the Following Statements Is True with Regard to Depreciation