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Methods of depreciation

1. Why do we have different methods of depreciation that a company can use?
2. Which accounting method provides the lowest net income?
3. Will computerized systems allow you to enter a transaction out of balance?
4. Why is it important to have some uniformity in financial statements?

Please include references for the above questions.

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1. Why do we have different methods of depreciation that a company can use?

Different depreciation methods that a company can pursue include straight line deprectiation, reducing balance or written down depreciation, declining balance method of depreciation. We have different methods of depreciation to suit different types of circumstances revolving use of assets. For example, in some circumstances, usage of asset is uniform or constant throughout the life of the asset whereas in certain cases, the asset is heavily used in first few years of its life. Hence to suit different circumstances, various types ...

Solution Summary

Methods of depreciation, lowest net income, computerized systems, uniformity

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