Ganley Rental Cars recently acquired several new cars for their fleet.The cars have an estimated life of 4 years and should be driven 80,000 miles.What is the most appropriate method of depreciation to properly match revenues and expenses?

Question

Quizplus · Accepted Answer

Units-of-production depreciation matches the expense of the asset with the actual usage of the asset. In this case, the rental cars will be used and driven and the depreciation will be based on the actual mileage driven. Therefore, units-of-production depreciation is the most appropriate method for Ganley Rental Cars to use.

Ganley Rental Cars Recently Acquired Several New Cars for Their