With the half-year rule, the depreciation percentage is lower in the first year than in the second year.This is due to the fact that:
A)the depreciation percentage increases in each year.
B)assets are assumed to be acquired at mid-year.
C)depreciation expense increases at the rate of inflation.
D)declining balance depreciation is less attractive than straight-line depreciation.

Question

Quizplus · Accepted Answer

The half-year rule assumes that assets are acquired at mid-year, meaning that the full year's depreciation expense is not taken in the first year. Therefore, the depreciation percentage is lower in the first year with the assumption that the asset was not used for the full year.

With the Half-Year Rule, the Depreciation Percentage Is Lower in the First