Under the straight-line depreciation method, which statement best describes the depreciation expense over the asset's life?

Under the straight-line depreciation method, which statement best describes the depreciation expense over the asset's life?

• A. It increases over time.
• B. It decreases over time.
• C. It remains constant.
• D. It is unpredictable.

Answer: (C)

Straight-line depreciation spreads the asset’s depreciable cost evenly over its estimated useful life. Because you divide the total amount to be expensed (cost minus residual value) by the number of periods in the asset’s life, the depreciation booked each year is the same. For example, if the depreciable cost is 8,000 over 8 years, you record 1,000 of depreciation each year. This constant allocation reflects the assumption that the asset wears out evenly over time. Other methods can front-load more expense in early years or vary with usage, making depreciation amounts year to year less predictable. So the depreciation expense remains constant over the asset’s life.

Straight-line depreciation spreads the asset’s depreciable cost evenly over its estimated useful life. Because you divide the total amount to be expensed (cost minus residual value) by the number of periods in the asset’s life, the depreciation booked each year is the same. For example, if the depreciable cost is 8,000 over 8 years, you record 1,000 of depreciation each year. This constant allocation reflects the assumption that the asset wears out evenly over time. Other methods can front-load more expense in early years or vary with usage, making depreciation amounts year to year less predictable. So the depreciation expense remains constant over the asset’s life.