An accelerated depreciation method:
A)Results in reporting higher earnings every year.
B)Depreciates an asset over a shorter life than does the straight-line method.
C)Recognizes more depreciation expense in the early years of an asset's useful life and less in the later years.
D)Is required for assets that become technologically obsolete before they physically wear out.

Question

Quizplus · Accepted Answer

An accelerated depreciation method recognizes more depreciation expense in the early years of an asset's useful life and less in the later years. This results in lower reported earnings in the early years and higher reported earnings in the later years. Option A is incorrect because an accelerated depreciation method results in lower reported earnings in the early years. Option B is partially correct as an accelerated depreciation method does depreciate an asset over a shorter life than the straight-line method, but this is not the defining characteristic of an accelerated depreciation method. Option D is incorrect as the technological obsolescence of an asset is not a requirement for using an accelerated depreciation method.

An Accelerated Depreciation Method