Use of Straight-Line Depreciation in Comparison to the Diminishing-Balance Method

question 198

Multiple Choice

Use of straight-line depreciation in comparison to the diminishing-balance method results in

• A) a greater amount of depreciation in the earlier years of an asset's useful life.
• B) a greater amount of depreciation in the later years of an asset's useful life.
• C) an equal amount of depreciation over an asset's total useful life.
• D) both b and c

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Definitions:

Debits

Accounting entries that increase asset or expense accounts, or decrease liability or equity accounts, on the left side of a general ledger.

Credits

Accounting entries that increase liability, revenue, or equity accounts and decrease asset or expense accounts.

Transaction

Refers to an agreement or exchange between two or more parties that results in the movement of money or resources.

Exchanges

Transactions where goods, services, or securities are traded between two parties without the use of cash.