Question

The straight-line depreciation method: A. reports an equal amount of depreciation expense each year. B. can be used only by small companies. C. reports a higher amount of depreciation expense in the early years of an asset's use. D. reports more depreciation expense in a year when an asset is heavily used and less in a year when the asset is hardly used at all.

Answer 1

A

Step-by-step explanation:

Depreciation is a method used in expensing the cost of an asset

Straight line depreciation expense = (Cost of asset - Salvage value) / useful life

The straight line depreciation method reports an equal amount of depreciation expense each year.

An example of the straight line depreciation method

cost of asset = 10,000

salvage value = 0

useful life = 5

straight line depreciation = (10,000 - 0) / 5 = 2000

depreciation expense each year would be 2000