One reason that generally accepted accounting principles allow firms to choose different methods for computing amortization is that amortization expenses have no effect on net income.

Question

Quizplus · Accepted Answer

Amortization expenses do have an effect on net income as they represent the allocation of the cost of an asset over its useful life. Different methods of computing amortization can lead to different amounts of expenses and therefore affect net income.

One Reason That Generally Accepted Accounting Principles Allow Firms to Choose