Which of the following statements is true regard to depreciation expense? A. A c

Question

Which of the following statements is true regard to depreciation expense?

A. A company should use the depreciation method that best matches expense recognition with the use of the asset.

B. A company using straight line will show a smaller book value for assets than if the same company uses double declining balance.

C. Choosing double declining balance over straight line will produce a greater total depreciation expense over the asset's life.

D. Different companies in the same industry always depreciate similar assets by the same methods.

Explanation / Answer

A. A company should use the depreciation method that best matches expense recognition with the use of the asset. B is false because company using straight line will not show a smaller book value for assets compared to double declining. In fact, it will do the exact opposite. Double declining method will depreciate an asset twice as fast as the straight-line method. C and D are false and simply do not make sense.

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