Which of the following statements is true regard to depreciation expense? A. A c
ID: 2379117 • Letter: W
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.