Depreciation tends to ________ each year with the Modified Asset Cost Recovery System (MACRS) when sales go up.
A) go up
B) remain the same
C) increase exponentially
D) go down

Question

Quizplus · Accepted Answer

Depreciation tends to decrease each year with MACRS when sales go up. This is because MACRS uses a declining balance method, which means that the depreciation rate decreases each year. As sales increase and the asset is used more heavily, its value decreases faster, resulting in a lower depreciation amount.

Depreciation Tends to ________ Each Year with the Modified Asset