Question

Which depreciation method is the best method for a company to use? Why?

Which depreciation method is the best method for a company to use? Why?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Straight-Line method is probably the best method for a company to use as it is easy to calculate and the depreciation expense is unifrom throughout the life of the asset and the transition of depreciation from financials to tax is simple.

The above conculsion is drawn with regards to a general company. However in real life the nature of the company is required to be considered like for an industrial company which producing by applying large factory and machinery and producing huge outputs will finf Units of Production method as the best method for depreciation as the same is dependent upon the production made in a particular year. If production is more then the company will be able to claim greater deduction for depreciation and vice versa.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
What do you think is the best method used in the calculation of depreciation? Why is...
What do you think is the best method used in the calculation of depreciation? Why is that?
Why would a company use the sum-of-the-year or declining-balance method over the straight line method to...
Why would a company use the sum-of-the-year or declining-balance method over the straight line method to calculate depreciation?
which method do you think is best for taxable deductions and paying less taxes and why?...
which method do you think is best for taxable deductions and paying less taxes and why? Which you prefer to choose? which method do you think is best for taxable deductions and paying less taxes and why? Which you prefer to choose? Straight Line, MACRS, and Declining Balance methods
Which depreciation method would you use if you were trying to minimize income taxes? Which method...
Which depreciation method would you use if you were trying to minimize income taxes? Which method would you choose if you wanted to maximize net income? Suppose you wanted to do both?
Which is the following is the best reason to use the payback method to evaluate investments?...
Which is the following is the best reason to use the payback method to evaluate investments? Select One: a. The payback method covers all cash infliws and outflows for the duration of the investments. b. if you use the payback method, you do not neef to perform additional analysis. c. the payback method adjust for the projects riskiness. d. the payback method is easy to use and understand for most people, regardless of training.
Which of the following best explains why the net present value method of capital budgeting is...
Which of the following best explains why the net present value method of capital budgeting is preferred over the internal rate−of−return ​method? . the net present value method is expressed as a percentage of initial investment B. the calculation under the net present value method is easy as it does not use time value of money C. the percentage return computed under the net present value method is very easy to compare D. the net present values of individual projects...
Find two companies that use the Sum of the Years' Digits method of depreciation. The company...
Find two companies that use the Sum of the Years' Digits method of depreciation. The company that you find must be a real-life U.S. company, listed on one of the stock exchanges. Please make sure that it is an existing company by looking for its ticker symbol.
Which Method Will You Likely Use if You Take the Standard Deduction, and Why? IRS METHOD...
Which Method Will You Likely Use if You Take the Standard Deduction, and Why? IRS METHOD OR TAX COURT METHOD?
If I have a candle company, what costing method is best to determine the cost of...
If I have a candle company, what costing method is best to determine the cost of products and services. Selecting from job costing, process costing, and activity-based costing. Why would it be the best option for the candle company?
Explain why the Value-Based method of reimbursement is the best method for the U.S. health care...
Explain why the Value-Based method of reimbursement is the best method for the U.S. health care system.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT