Question

The depreciation method that determines the depreciation charge for the period by multiplying a depreciation rate (often twice the straight-line rate) by the asset's beginning-period book value is known as the __________ method.

Answer 1

The double-declining depreciation method.

Step-by-step explanation:

The double-declining is an accelerated asset depreciation method. The method seeks to recognize most of an asset depreciation in its first years of existence. It is referred to as double-declining because it uses twice the depreciation rate of the straight-line method.

The double-declining method is suitable for assets that are consumed at a high rate during the initial stages of their useful life. Organizations that prefer to incur more expenses on an asset earlier and enjoy profits later, or those wishing to defer taxes, can also use this method.