Companies generally use an accelerated method to compute depreciation for tax purposes and the straight-line method to compute depreciation for the financial statements.

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This statement is generally true. The accelerated method, such as the MACRS system in the US, allows companies to take larger depreciation deductions in the early years of an asset's life, which can lower their taxable income and tax liability. On the other hand, the straight-line method allocates the same amount of depreciation expense evenly over the useful life of an asset and reflects a more consistent level of expense in the financial statements. However, it is worth noting that companies may use different depreciation methods for tax and financial reporting purposes, depending on their specific circumstances and accounting policies.

Companies Generally Use an Accelerated Method to Compute Depreciation for Tax