Which of the following would be increased by accounting policy change involving use of the reducing balance method of depreciation in place of the straight-line method,leading to an increase in depreciation expense?

Question

Quizplus · Accepted Answer

The reducing balance method of depreciation charges a higher amount of depreciation expense in the earlier years of an asset's useful life, resulting in a larger expense and thus a lower net profit. This change in accounting policy will increase expenses due to higher depreciation expense every year, leading to a decrease in net profit. Therefore, option D is the correct choice.

Which of the Following Would Be Increased by Accounting Policy