The double-declining balance method is applied by (1) computing the asset's straight-line depreciation rate, (2) doubling it, (3) subtracting salvage value from cost, and (4) multiplying the rate times the net value.

Question

Quizplus · Accepted Answer

The statement is partially correct but incomplete. Step (1) and (2) are accurate, but step (3) should be multiplying the straight-line depreciation rate by 2 instead of doubling it, and step (4) should be multiplying the rate times the book value (cost minus accumulated depreciation) instead of the net value.

The Double-Declining Balance Method Is Applied by (1) Computing the Asset's