Explain why accelerated depreciation methods are superior to straight-line methods for income tax purposes.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
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Chapter1: Financial Statements And Business Decisions
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Explain why accelerated depreciation methods are superior to straight-line methods for income tax purposes.

 

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Depreciation refers to the reduction in the price of value of assets due to its wear and tear. Basically ,it is a gradual decrease in value of asset each year. Machinery, equipment and currency are some assets which decreases due to gradual depreciation charged. There are various methods which can be used for charging the depreciation.

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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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