Company a Uses an Accelerated Amortization Method While Company B

question 42

Multiple Choice

Company A uses an accelerated amortization 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 true?

• A)Company A will have higher amortization 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 amortization expense until residual value is reached.
• C)Company B will have higher amortization 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 amortization expense until residual value is reached.

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Definitions:

Ultraviolet Radiation

Electromagnetic radiation with a wavelength shorter than that of visible light, but longer than X-rays, which can have effects on the skin such as sunburns and vitamin D synthesis.

Gamma Radiation

Electromagnetic radiation of high frequency and thus high energy, often emitted by radioactive materials.

Air Pollution

The presence of substances in the air that are harmful to human health, the environment, or the climate.

Boreal Forest

A large biome of coniferous forest located in the northern regions of North America, Europe, and Asia, characterized by cold temperatures and short growing seasons.