Because of the way that U.S. tax law defines depreciation, depreciation for tax purposes is:
A)always less than true economic depreciation.
B)always greater than true economic
C)depreciation. always equal to true economic depreciation.
D)sometimes greater than true economic depreciation and sometimes less.

Question

Quizplus · Accepted Answer

Tax law allows for accelerated depreciation, which means that the amount deducted for tax purposes each year may be greater than the true economic depreciation. However, there are also limits and restrictions on this accelerated depreciation, so in some cases, the amount deducted may be less than the true economic depreciation. Therefore, depreciation for tax purposes can be sometimes greater or sometimes less than true economic depreciation.

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