Question

The MACRS depreciation method uses as its base the _________ method.

		straight line
		sum-of-the-years-digits
		double declining balance
		units of production

Answer 1

Option (c) is correct

Thde MACRS depreciation method uses as its base the double declining balance method.

MACRS stands for Modified accelerated cost recovery system (MACRS). It is depreciation method used for tax purposes. It allows higher depreciation in early part of life and lower depreciation in later parts. So, it follows double declining balance method in charging the depreciation expense, as double declining balance method also follows higher deprecaition in early years and lower depreciation in later years.