2.8 Discuss the difference between the straight-line method of depreciation and the accelerated methods. Why do companies use different depreciation methods for tax reporting and financial reporting? The straight-line method allocates an equal amount of expense to each year of the depreciation period, whereas an accelerated method apportions larger amounts of expense to the earlier years of the asset's depreciable life and lesser amounts to the later years. Most companies use different depreciation methods for tax and financial reporting. This is because these companies often make different accounting choices in financial reporting and tax reporting since there are different incentives that have been put in place. 2.9 What is the purpose of listing the account "Commitments and contingencies" on the balance sheet even though no dollar amounts appear? It is intended to draw attention to the fact that required disclosures can be found in the notes to the financial statements