Question

A corporation​ ________. A. can use straightdash-line depreciation method for tax purposes and MACRS depreciation method financial reporting purposes B. can use different depreciation methods for tax and financial reporting purposes C. must use the straightdash-line depreciation method for tax purposes and double declining depreciation method financial reporting purposes D. must use different depreciation method for tax​ purposes, but strictly mandated depreciation methods for financial reporting purposes

Answer 1

Answer:

The correct answer is B. can use different depreciation methods for tax and financial reporting purposes.

Explanation:

Corporations are allowed to use various depreciation methods (in a straight line, double decreasing balance and the sum of the digits of the years). For fiscal purposes, using the MACRS recovery periods, the assets of the first four classes of property are depreciated using the double declining balance method.