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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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