The MACRS differs from straight-line depreciation computed for financial reporti

Question

The MACRS differs from straight-line depreciation computed for financial reporting. in this respect, which of the following is NOT true? 1. The MACRS uses longer asset lives. 2. The MACRS decreases the income taxes payable in the early years of an assets life. The MACRS differs from straight-line depreciation computed for financial reporting. in this respect, which of the following is NOT true? 1. The MACRS uses longer asset lives. 2. The MACRS decreases the income taxes payable in the early years of an assets life. The MACRS differs from straight-line depreciation computed for financial reporting. in this respect, which of the following is NOT true? 1. The MACRS uses longer asset lives. 2. The MACRS decreases the income taxes payable in the early years of an assets life.

Explanation / Answer

MACRS is a method where depreciation is provided at higher rates in the starting period of asset and falls gradually as asset is used for the next year therby reducing income and hence reducing the tax bill. So by above we can conclude that depreciation is high in early life and thus tax bills are lower in early llife of asset.

MACRS uses assets of all kinds of lives. It is not meant specifically for longer asset lives. hence statement 1 is incorrect

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.