The Depreciation Method That Produces Larger Depreciation Expense During the Early

question 11

Multiple Choice

The depreciation method that produces larger depreciation expense during the early years of an asset's life and smaller expense in the later years is a(an) :

• A)Accelerated depreciation method.
• B)Book value depreciation method.
• C)Straight-line depreciation method.
• D)Units-of-production depreciation method.
• E)Unrealized depreciation method.

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Definitions:

Operating Expenses

The costs associated with the normal operations of a business, such as rent, utilities, and payroll, excluding cost of goods sold.

Dividends

Payments made by a corporation to its shareholder members, usually as a distribution of profits.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for changes in balance sheet accounts to reflect cash transactions.

Comparative Balance Sheets

Financial statements that present the assets, liabilities, and shareholders' equity of a company at different points in time for comparison.