Which of the following reasons provides the best theoretical support for accelerated depreciation?
A) Assets are more efficient in early years and initially generate more revenue.
B) Expenses should be allocated in a manner that "smoothes" earnings.
C) Repairs and maintenance costs will probably increase in later periods,so depreciation should decline.
D) Accelerated depreciation provides easier replacement because of the time value of money.

Question

Quizplus · Accepted Answer

The reason that assets are more efficient in early years and initially generate more revenue supports accelerated depreciation. By depreciating the asset more quickly in the early years, it better matches the revenue generated by the asset and provides a more accurate reflection of its value over time.

Which of the Following Reasons Provides the Best Theoretical Support