Depreciation is higher in earlier years and income is lower in the later years when using accelerated versus straight-line methods.

Question

Quizplus · Accepted Answer

Accelerated depreciation methods, such as the double-declining balance or sum-of-the-years'-digits method, allocate a higher amount of depreciation expense to the earlier years of an asset's life, resulting in lower income in those years. Straight-line depreciation, on the other hand, allocates equal amounts of depreciation expense each year, resulting in more even income levels over the life of an asset.

Depreciation Is Higher in Earlier Years and Income Is Lower