Business Finance
XACC291 Week 2 discussion

Question Description

Help me study for my Business class. I’m stuck and don’t understand.

To spark some conversation consider the following and respond after you have read Chapter 10 of our Text:

Which depreciation method provides you the highest depreciation expense in the first year? Why? ?

Student has agreed that all tutoring, explanations, and answers provided by the tutor will be used to help in the learning process and in accordance with Studypool's honor code & terms of service.

Final Answer

In first year the highest expense of depreciation offers by declining-balance method and also known as method of accumulated-depreciation. This is due to the deprecation calculation on the book-value. Although the rate of deprecation doesn’t change, but book value of asset steadily decline due to change the expense of depreciation from precedent year to coming year. So, when useful life of asset is long than high deprecation is charged and as the asset’s useful life reduce the deprecation also low. It demonstrates that superior advantages of asset result in higher expense of depreciation(Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, 2012).


References

Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, (2012). Accounting: Tools for Business Decision Making. Published by: Wiley; 5 edition.

UT Austin

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