Question

Which depreciation method generally will result in the greatest amount of depreciation expense in the first year of the asset's life?

A) Straight-line
B) Double-declining balance
C) Activity-based

Answer 1

The double-declining balance depreciation method generally results in the greatest amount of depreciation expense in the first year of an asset's life.

Step-by-step explanation:

The double-declining balance depreciation method generally results in the greatest amount of depreciation expense in the first year of an asset's life.

This method is an accelerated depreciation method that allows for higher depreciation expenses in the early years of an asset's life and lower expenses in the later years.

For example, if a piece of equipment has a useful life of 5 years, the double-declining balance method might depreciate it by 30% in the first year, compared to a straight-line method that would depreciate it by 20% each year.