When calculating declining balance depreciation, the straight-line rate was used instead of double the straight-line rate. In the first year of ownership, this error would cause:

Question

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Using the straight-line rate instead of double the straight-line rate in declining balance depreciation will result in a lower depreciation expense in the first year. This leads to the period's end assets being overstated because they are not reduced as much as they should be.

When Calculating Declining Balance Depreciation, the Straight-Line Rate Was Used