W Company just bought ten new cars for its salespeople to use.The company expects to use these cars for two or three years and then replace them.If W Company calculates straight-line depreciation using an estimated useful life of three years,this accounting choice would be considered ________.

Question

Quizplus · Accepted Answer

Using a shorter useful life for depreciation purposes results in higher depreciation expenses each year, which reduces net income. This is considered aggressive accounting as it accelerates expense recognition.

W Company Just Bought Ten New Cars for Its Salespeople