Depreciation

-------------- A non-cash expense that reduce the value of an asset over time.

• Salvage Value

• Useful Life

• Depreciation

------------ Value of asset at the end of useful life.

• Useful Life

• Salvage Value

• Acquisition Cost

------------ the period over which you expect to get benefits from the asset.

• Useful Life

• Salvage Value

• Acquisition Cost

If the useful life is 4 years how much will be the depreciation rate?

• 20%

• 25%

• 50%

Fatima Company purchased a truck for BD20,000. and paid BD1,000 for tax, BD500 for freight cost and BD200 for insurance.

Calculate the Acquisition cost?

• BD21,900

• BD21,500

• BD21,700