The MACRS Depreciation Tables Automatically Switch to the Straight-Line Method

question 117

True/False

The MACRS depreciation tables automatically switch to the straight-line method when the straight-line method yields a higher annual depreciation amount than the declining balance method.

---

Definitions:

Accrual Basis

An accounting method where transactions are recorded when they are earned or incurred, regardless of when cash is exchanged.

Cash Basis

An accounting method where revenues and expenses are recorded when they are actually received or paid out, not when they are earned or incurred.

Time Basis

A method of compensation or work arrangement based on the amount of time spent on a job rather than the task's outcome.

Expenses Recorded

The process of documenting all costs incurred during a specific period in the financial records, which are used to assess the company's profitability.