Question

Assuming this is the last year an asset is being depreciated, which method will show the highest total assets on the year-end balance sheet?

A) Straight-Line Depreciation
B) Double Declining Balance Depreciation
C) Units of Production Depreciation
D) Sum-of-the-Years'-Digits Depreciation

Answer 1

The Double Declining Balance Depreciation method will show the highest total assets on the year-end balance sheet.

Step-by-step explanation:

The method that will show the highest total assets on the year-end balance sheet assuming this is the last year an asset is being depreciated is Double Declining Balance Depreciation.

This method allows for larger depreciation charges in the earlier years of an asset's life, resulting in lower book value, and therefore higher total assets, at the end of the asset's useful life.

For example, if a machine has a useful life of 5 years, the Double Declining Balance Depreciation method would assign a higher depreciation expense in the earlier years, leading to a lower book value and a higher total assets value on the year-end balance sheet.