When the amount of use of a fixed asset varies from year to year, the method of determining depreciation expense that best matches allocation of cost with revenue is
A) the double-declining-balance method
B) the straight-line method
C) the units-of-activity method
D) MACRS

Question

Quizplus · Accepted Answer

The units-of-activity method best matches allocation of cost with revenue when the amount of use of a fixed asset varies from year to year. This method charges a varying amount of depreciation each period based on the asset's usage, which correlates with the generation of revenue.

When the Amount of Use of a Fixed Asset Varies