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Roger Margotta, the CFO of Brainchild, Inc., is considering several alternative methods of depreciation for long-term...

Roger Margotta, the CFO of Brainchild, Inc., is considering several alternative methods of depreciation for long-term assets. With respect to the double-declining method of depreciation, which of the following statements is the most accurate?

Group of answer choices

A) Current ratio will increase over the life of the asset.

B) Asset turnover will increase over the life of the asset.

C) Depreciation expense will increase of the life of the asset.

Solutions

Expert Solution

Under double declining balance method, the depreciation expense is the highest in the initial years and it keeps on decreasing over the life of the asset

Current ratio is not impacted due to depreciation

Over the life of asset, assets decrease due to aggressive depreciation in the initial years. This causes the asset turnover to increase over the life of the asset

Correct choice B

jeff jeffy answered 2 years ago
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