On January 1,Year 1,Dinwiddie Company purchased a car that cost $45,000.The car has an expected useful life of 5 years and a $10,000 salvage value.Which of the following statements is true?
A)The total amount of depreciation expense recognized over the six-year useful life will be greater under the double-declining-balance method than the straight-line method.
B)The amount of depreciation expense recognized in Year 4 would be greater if Dinwiddie depreciates the car under the straight-line method than if the double-declining-balance method is used.
C)At the end of Year 2,the amount in accumulated depreciation account will be less if the double-declining-balance method is used than it would be if the straight-line method is used.
D)None of these statements is true.

Question

Quizplus · Accepted Answer

Double-declining-balance depreciation produces a large amount of depreciation in the first year of an asset's life and progressively smaller levels of expense in each succeeding year.Because the double-declining-balance method recognizes depreciation expense more rapidly than the straight-line method does,it is called an accelerated depreciation method.In the 4th year of the car's 6-year useful life,straight-line depreciation will produce greater depreciation expense.

On January 1,Year 1,Dinwiddie Company Purchased a Car That Cost