Flying High Air acquires a new aircraft.It has an estimated life of 10 years and should last for at least 20,000 hours of flight.What is the most appropriate method of depreciation to properly match revenues and expenses?

Question

Quizplus · Accepted Answer

The units-of-production method is most appropriate for the aircraft since it allocates the cost of the asset based on its usage or production, which in this case is measured in hours of flight. This method matches the expense (depreciation) with the revenues generated by the asset more accurately than time-based methods, as it reflects the wear and tear on the aircraft based on actual usage.

Flying High Air Acquires a New Aircraft