Chapter 08, Reading Question 13 Which of the following statements is always true

Question

Chapter 08, Reading Question 13 Which of the following statements is always true when describing the double declining balance (DDB) depreciation method? The double declining balance (DDB) method has a larger depreciation charge at the end of the recovery period. The double declining balance (DDB) method has a larger depreciation charge than straight-line depreciation method at the end of the recovery period The double declining balance (DDB) method has a larger depreciation charge at the beginning of the recovery period. The double declining balance (DDB) method w k value that equals the salvage value of an asset calculate a boo

Explanation / Answer

The third option is correct.

DDB method has a larger depreciation charge at the beginning of the recovery period. DDB rate is twice the SL depreciation rate. Since the larger amount of asset value is reflected in the beginning period, the depreciation would also be high.

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