Question

The book value of an asset when using double-declining-balance depreciation is always greater than the book value from using straight-line depreciation, except at the beginning and the end of the asset's useful life, when it is the same.

TRUE OR FALSE?

Answer 1

False

The book value of an asset when using double-declining-balance depreciation is always lesser than the book value from using straight-line depreciation, except at the beginning and the end of the asset's useful life, when it is the same.

The double-declining-balance method allocates a greater amount of depreciation in the earlier years of an asset's life than in the later year where as The straight-line method depreciates an asset by an equal amount each accounting period. The double-declining-balance allocates higher depreciaition hence the book value will be lower than complare to straight line method