Asked by Noemi Villalobos on Apr 28, 2024
Verified
The MACRS differs from straight-line depreciation computed for financial reporting.In this respect, which of the following is not true?
A) The MACRS uses longer asset lives.
B) The MACRS ignores residual value.
C) The MACRS decreases the income taxes payable in the early years of an asset's life.
D) The MACRS accelerates cost recovery.
MACRS
The Modified Accelerated Cost Recovery System, a method of depreciation for tax purposes allowing for faster recovery of assets' costs to stimulate investment.
Straight-Line Depreciation
An approach to spreading the expense of a tangible asset across its lifespan in uniform yearly sums.
Income Taxes
Taxes levied by governments on the income generated by businesses or individuals within their jurisdiction.
- Gain an understanding of and perform calculations for depreciation in the context of financial reporting and tax obligations, using both the MACRS and straight-line approaches for calculating tax deductions.
Verified Answer
Learning Objectives
- Gain an understanding of and perform calculations for depreciation in the context of financial reporting and tax obligations, using both the MACRS and straight-line approaches for calculating tax deductions.
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