Both the straight-line depreciation method and the double-declining-balance depreciation method:
A)Produce the same total depreciation over an asset's useful life.
B)Produce the same depreciation expense each year.
C)Produce the same book value each year.
D)Are acceptable for tax purposes only.
E)Are the only acceptable methods of depreciation for financial reporting.

Question

Quizplus · Accepted Answer

Both methods produce the same total depreciation expense over an asset's useful life, but they allocate the expense differently each year. The straight-line method spreads the expense evenly over the useful life of the asset, while the double-declining-balance method charges more expense in the early years of the asset's life and less in later years.

Both the Straight-Line Depreciation Method and the Double-Declining-Balance Depreciation Method