Straight-line produces a lower net income than accelerated methods in the earlier years of an asset's life.
Straight-line produces a higher net income than accelerated methods in the earlier years of an asset's life.

Question

Quizplus · Accepted Answer

Accelerated methods, such as the double-declining balance or sum-of-the-years'-digits method, allocate more depreciation expense in the earlier years of an asset's life, while straight-line method allocates equal amounts of depreciation expense over the asset's useful life. Therefore, accelerated methods will result in lower net income in the earlier years and higher net income in the later years compared to straight-line method.

Straight-Line Produces a Lower Net Income Than Accelerated Methods in the Earlier