Company A uses an accelerated amortization method while Company B uses the straight-line method.All other things equal,during the first few years of the asset's use,Company A will show which of the following compared to Company B?
A)Higher asset values and higher net income.
B)Lower asset values and higher net income.
C)Higher asset values and lower net income.
D)Lower asset values and lower net income.

Question

Quizplus · Accepted Answer

Accelerated amortization results in higher expense and lower asset values in the early years compared to the straight-line method, leading to lower net income for Company A.

Company a Uses an Accelerated Amortization Method While Company B