The double-declining-balance method calculates depreciation on an asset at double the rate used in the:
A) units-of-production method of depreciation.
B) straight-line method of depreciation.
C) Modified Accelerated Cost Recovery System (MACRS).
D) the computation of interest payment on loan availed to buy the asset.

Question

Quizplus · Accepted Answer

The double-declining-balance method is an accelerated method of depreciation, which means that it takes more depreciation in the early years of an asset's life and less in the later years. This method calculates depreciation at double the rate used in the straight-line method of depreciation, which spreads the depreciation expense evenly over an asset's useful life. The other options listed do not involve depreciation calculations.

The Double-Declining-Balance Method Calculates Depreciation on an Asset at Double