Choose the statement which best describes the straight-line method of depreciation.
A) Depreciation expense is greater at the beginning of the asset's life.
B) Depreciation is a fixed percentage of the carrying value of the asset.
C) Depreciation is allocated equally over each year of the asset's life.
D) Both A and C are correct.

Question

Quizplus · Accepted Answer

The straight-line method of depreciation allocates an equal amount of depreciation expense over each year of the asset's life, so option C is correct. Option A is incorrect because depreciation expense is the same each year under straight-line depreciation, rather than being greater at the beginning of the asset's life. Option B is incorrect because depreciation is a fixed dollar amount each year under straight-line depreciation, rather than being a fixed percentage of the carrying value of the asset.

Choose the Statement Which Best Describes the Straight-Line Method of Depreciation