Which method of depreciation would result in a depreciation expense that is more if the asset is used more and a depreciation expense that is less if the asset is used less? Group of answer choices Double-declining balance There is no such method Units of production Straight-line
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Depreciation expense is the reduction in the value of the asset due to its wear and tear or usage.
The depreciation expense is recorded in the income statement. The accumulated depreciation is reduced from the cost of the asset in the Balance Sheet.
There are different methods for calculating depreciation which are discussed below:
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