Double declining balance depreciation is used in the first year when straight line depreciation should be used.This error would cause:

Question

Quizplus · Accepted Answer

Double declining balance method results in higher depreciation expense compared to straight line method. Therefore, using double declining balance method instead of straight line method in the first year would result in understated net income for the period as higher expense is recognized. However, this does not affect period-end assets.

Double Declining Balance Depreciation Is Used in the First Year