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Hill Inc. purchased an asset on January 1, 2016. Hill chose an accelerated depreciation method to depreciate the asset.

Which of the following is correct if Hill would have chosen the straight-line depreciation method instead?A. Depreciation expense would have been lower in 2016.
B. The book value of the asset would have been lower at the end of 2016.
C. The net income would have been lower during 2016.
D. The accumulated depreciation balance would have been higher at the end of 2016.

Respuesta :

Answer:

A. Depreciation expense would have been lower in 2016.

Explanation:

Under the accelerated depreciation method the depreciation is charged with a higher pace, basically by charging huge depreciation in initial years of life of an asset.

Under straight line method depreciation is charged normally, so that the depreciation expense is same for all years of life of an asset.

Accordingly if the company would have used straight line method instead of accelerated depreciation method, depreciation would have been lower then what it is actually in the first year of asset that is 2016.

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