XACC291 Week 2 discussion

Business & Finance
Tutor: None Selected Time limit: 1 Day

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? ?

Jul 4th, 2014

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.

Jul 4th, 2014

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