Many Companies Use Accelerated Depreciation in Computing Taxable Income Because

question 75

Multiple Choice

Many companies use accelerated depreciation in computing taxable income because:

• A)It is required by the tax rules.
• B)It is required by financial reporting rules.
• C)It postpones tax payments until later years and the company can use the resources now to earn additional income before payment is due.
• D)Using it causes a company to use higher income in the early years of the asset's useful life.
• E)The results are identical to straight-line depreciation.

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Definitions:

X-Ray Tube

A device used in X-ray machines to produce X-rays by directing high-energy electrons at a metal target.

Electromagnetic

A specialized field of radiology that involves the use of both electrical and magnetic fields for diagnosis of disease processes.

Radiology

The medical specialty that uses imaging techniques, such as X-rays and MRI, to diagnose and treat diseases and injuries.

Magnetic Fields

Invisible fields that exert force on objects that possess magnetic properties or are moving electric charges.