The calculation of depreciation using the diminishing-balance method
A)ignores residual value in determining the amount to which a constant rate is applied.
B)multiplies a constant percentage times the previous year's depreciation expense.
C)yields an increasing depreciation expense each period.
D)multiplies a diminishing percentage times a constant carrying amount.

Question

Quizplus · Accepted Answer

The diminishing-balance method of depreciation applies a constant rate to the declining book value of the asset each year, ignoring the residual value in the calculation of the depreciation expense. This results in a higher depreciation expense in the early years of an asset's life, which gradually decreases over time.

The Calculation of Depreciation Using the Diminishing-Balance Method