Question

A company purchases machinery for ₹50 lakhs with a useful life of 10 years and salvage value of ₹5 lakhs. The company uses straight-line depreciation. Due to a change in accounting policy, it now switches to the Written Down Value (WD

  • V method mid-way, citing better matching of revenue with expenses. What is the impact on financial statements?
A Profit increases in later years
B Depreciation remains unchanged
C Profits rise in early years
D Depreciation increases in early years
E Tax liability reduces in later years
Practice Next

Hey! Ask a query