Question

The double-declining-balance method of depreciation causes:

a) more depreciation in the early years of an asset's use as compared to other depreciation methods
b) less depreciation in the early years of an asset's use as compared to other depreciation methods
c) the same amount of depreciation in the early years of an asset's use as compared to other depreciation methods
d) is not an acceptable depreciation method according to GAAP

Answer 1

The double-declining-balance method of depreciation results in more depreciation in the early years of an asset's life than other methods, aligning with GAAP for accelerating the depreciation expenses when the asset is more productive.

Step-by-step explanation:

The double-declining-balance method of depreciation causes more depreciation in the early years of an asset's use as compared to other depreciation methods. This accelerated depreciation method multiples the book value of an asset by a multiple of the straight-line depreciation rate. It's particularly used when an asset's productivity declines significantly over time or when there's a higher probability of technological obsolescence. The correct answer is: a) more depreciation in the early years of an asset's use as compared to other depreciation methods. The double-declining-balance method is an acceptable depreciation method according to Generally Accepted Accounting Principles (GAAP).