📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    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.

    Practice Next
    More Accounts Questions

    Relevant for Exams:

    ask-question