Which statement about accelerated depreciation methods is TRUE?
A)They provide higher amounts of depreciation expense in the early years of an asset's life and smaller amounts in the later years.
B)They provide equal amounts of depreciation expense each year.
C)They provide an unpredictable amount of expense each year because they are based upon the actual amount of an asset used up.
D)They report more total depreciation expense over the life of an asset.

Question

Quizplus · Accepted Answer

Accelerated depreciation methods such as double-declining balance and sum-of-the-years digits provide higher amounts of depreciation expense in the early years of an asset's life and gradually smaller amounts in the later years. This is because these methods assume that the asset will be more productive and useful in the early years and less so as it gets older, reflecting the economic reality of most assets. Option B is not true as straight-line depreciation provides equal amounts of depreciation expense each year, while option C is not true as accelerated depreciation methods are predetermined and do not vary based on actual usage. Option D is also not necessarily true as the total depreciation at the end of an asset's life will depend on the chosen depreciation method.

Which Statement About Accelerated Depreciation Methods Is TRUE