Question

A company changes from the straight-line method to an accelerated method of calculating depreciation, which will be similar to the method used for tax purposes. The entry to record this change will include a

Answer 1

Answer: c. credit to Accumulated Depreciation.

Explanation:

When using the accelerated method of depreciation, depreciation amounts are higher in the earlier years unlike the straight-line method where depreciation is constant throughout the life of the asset.

The difference between the depreciation according to Straight-line and depreciation will be sent to the accumulated depreciation account as a credit to reflect the change and the depreciation for the period.