Company A uses an accelerated depreciation method while Company B uses the straight-line method for an asset of the same cost and useful life. Which of the following statements is true?

Multiple Choice

• Company A will have higher depreciation expense in the early years but Company B will have the higher expense towards the end of the asset's useful life.

• Company A will consistently have higher depreciation expense until residual value is reached.

• Company B will have higher depreciation expense in the early years but Company A will have the higher expense towards the end of the asset's useful life.

• Company B will consistently have higher depreciation expense until residual value is reached.