GK
BUSINESS ECONOMICS
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
depreciate assets by an equal amount every year
|
|
|
depreciate more during the first years than in the later years
|
|
|
depreciate annually based on a decreasing weighting factor based on the economic life remaining
|
|
|
None of the answers above is correct
|
Detailed explanation-1: -Accelerated depreciation uses decreasing charge methods, including the sum-of-the-years’ digits (SYD), providing higher depreciation costs in earlier years and lower depreciation charges in later periods.
Detailed explanation-2: -Accelerated depreciation methods, such as double-declining balance (DDB), means there will be higher depreciation expenses in the first few years and lower expenses as the asset ages. This is unlike the straight-line depreciation method, which spreads the cost evenly over the life of an asset.
Detailed explanation-3: -The double declining balance (DDB) depreciation method is an approach to accounting that involves depreciating certain assets at twice the rate outlined under straight-line depreciation. This results in depreciation being the highest in the first year of ownership and declining over time.
Detailed explanation-4: -Straight-Line Depreciation Method In straight-line depreciation, the expense amount is the same every year over the useful life of the asset.