The MACRS differs from straight-line depreciation computed for financial reporting.In this respect, which of the following is not true?
A)The MACRS uses longer asset lives.
B)The MACRS ignores residual value.
C)The MACRS decreases the income taxes payable in the early years of an asset's life.
D)The MACRS accelerates cost recovery.

Question

Quizplus · Accepted Answer

The MACRS uses shorter asset lives than straight-line depreciation for financial reporting. This is because the MACRS is designed to accelerate cost recovery for tax purposes, while financial reporting depreciation tends to be spread out more evenly over the useful life of the asset.

The MACRS Differs from Straight-Line Depreciation Computed for Financial Reporting