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

    âš¡ Month End Offer - Flat 52% Off On All Courses! Enroll Now âš¡
    00:00:00 AM Left

    Question

    Under which method of depreciation, the value of a fixed

    asset is reduced uniformly over its useful life?
    A Diminishing value method Correct Answer Incorrect Answer
    B Sum of years’ digit method Correct Answer Incorrect Answer
    C Straight line method Correct Answer Incorrect Answer
    D Horizontal line method Correct Answer Incorrect Answer
    E Vertical line method Correct Answer Incorrect Answer

    Solution

    The method of depreciation in which the value of a fixed asset is reduced uniformly over its useful life is called the Straight-line method of depreciation. Under this method, the cost of the asset is spread out evenly over its useful life, and a fixed amount of depreciation is charged in each accounting period. The formula for calculating depreciation under the straight-line method is as follows: Depreciation expense = (Cost of asset – Salvage value) / Useful life

    Practice Next
    More Alternate Sources of Finance Questions

    Relevant for Exams:

    ask-question