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Homework answers / question archive / Both the straight-line depreciation method and the double-declining balance depreciation method: Produce the same total depreciation over an asset’s useful life Produce the same depreciation expense each year Produce the same book value each year Are acceptable for tax purposes only Are the only acceptable method of depreciation for financial reporting
Both the straight-line depreciation method and the double-declining balance depreciation method:
Answer:
d .
Step-by-Step explanation
Depreciation refers to the deduction in the value of the asset due to wear and tear or obsolescence. It is charged from the cost of the asset so that the true value of the asset can be portrayed. It reduces the tax liability of the tax payer as it reduces the cost of asset and so the proportion of the amount of interest charged on it.
Thus, both straight -line depreciation method and the double declining balance method (d) are acceptable for tax purpose only because these methods are simpler to calculate with few errors making it most accurate and consistent and are also mentioned in the Income tax act of 1961.
