Why Don't All Companies Use the Same Depreciation Method

question 209

Multiple Choice

Why don't all companies use the same depreciation method?

• A)US income tax regulations require that a company use the same depreciation method for both financial reporting and income taxes.
• B)Different depreciation methods might better reflect the pattern in which assets' economic benefits are used.
• C)All companies do use the same depreciation method.
• D)Only large companies are allowed to use some of the more complicated depreciation methods.

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Definitions:

Coefficient of Friction

A numerical value that represents the ratio of the force of friction between two objects to the force pressing them together.

Friction Facings

The material on the surface of clutch plates and brake pads that creates the necessary friction for operation.

Kinetic Resistance

Resistance encountered by a body in motion, typically due to frictional forces, material properties, or the medium through which the body moves.

Service Chamber

In the context of vehicle braking systems, a service chamber is part of the air brake system that houses a diaphragm which pushes the rod to apply the brakes when air pressure is supplied.