Which of the following typically results from using straight-line depreciation in the set of books for shareholders?
A)Net income appears higher during the early periods of depreciation
B)Less money is paid to the Canada Revenue Agency
C)Financial managers have more funds from operations available
D)Depreciable assets last for a longer period of time

Question

Quizplus · Accepted Answer

Straight-line depreciation evenly distributes the cost of an asset over its useful life, resulting in higher depreciation expenses in the earlier periods of use. This reduces net income during those periods, but as the asset ages and the depreciation expense decreases, net income will gradually increase.

Which of the Following Typically Results from Using Straight-Line Depreciation