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    Question

    Under the Written Down Value (WDV) method of

    depreciation, the WDV of an asset is always:
    A Less than zero Correct Answer Incorrect Answer
    B Equal to zero Correct Answer Incorrect Answer
    C Equal to the salvage value of the asset Correct Answer Incorrect Answer
    D More than zero Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    The Written Down Value (WDV) method applies depreciation at a fixed percentage on the reducing balance of the asset every year. • This means that the depreciable value reduces year after year, but it never becomes exactly zero. • Even after years of charging depreciation, the asset will always retain some positive value in the books. • Hence, WDV can never be zero or negative under this method. Thus, the WDV of an asset under this method is always more than zero.

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