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level: Depreciation

Questions and Answers List

level questions: Depreciation

QuestionAnswer
What is the straight line method of depreciation?An equal amount of depreciation is charged each year.
What is the Reducing balance method of depreciation?The depreciation charge each year is a fixed percentage of the net book value at the end of the previous year.
What is depreciation?To charge of the cost of a non-current asset over its useful life.
Net Book Value =Asset Cost/value less depreciation
How is straight line depreciation calculated?(Original Cost - Residual value) ÷ Estimated useful life
What is the accounting entry for charging depreciation?Dr Depreciation Expense a/c Cr Accumulated Depreciation a/c
What depreciation balance will appear in the SFP?The balance from the Accumulated Depreciation A/C will appear as a deduction from the cost of the assets.
What depreciation balance will appear in the SPL?The balance from the Depreciation Expense A/C will appear as an expense.