DEPRECIATION PART 2 3E

DEPRECIATION = allocation of cost of non-current asset over its useful life.

• TRUE

• FALSE

% x (Cost - Accumulated depreciation)

• STRAIGHT LINE METHOD

• REDUCING BALANCE METHOD

% of NET BOOK VALUE =

• Straight Line method

• Reducing-balance method

Cost = $10000. Scrap value = $2000 Useful life 4 years.

Depreciation =

• $2000/year

• $2500/year

Depreciation = $2000/ year.

Cost = $10000

NET BOOK VALUE at END of YR 4 =

• $2000

• $8000

Net book value = can be NEGATIVE

• True

• False

Accumulated depreciation INCREASE =

• COST DECREASE

• NET BOOK VALUE DECREASE

Choose the depreciation method that is

• EASIER

• REFLECT PATTERN OF USAGE OF NCA

ACCUMULATED Depreciation =

• expense

• income

• NONE of the above

ACCUMULATED depreciation = appear in statement of financial

• PERFORMANCE

• POSITION