Company a Uses an Accelerated Depreciation Method While Company B

question 220

Multiple Choice

Company A uses an accelerated depreciation method while Company B uses the straight-line method for an asset of the same cost and useful life.Which of the following statements is correct?

• A) Company A will have higher depreciation expense in the early years, but Company B will have the higher expense towards the end of the asset's useful life.
• B) Company A will consistently have higher depreciation expense until residual value is reached.
• C) Company B will have higher depreciation expense in the early years, but Company A will have the higher expense towards the end of the asset's useful life.
• D) Company B will consistently have higher depreciation expense until residual value is reached.

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