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Which of the following is a method of calculating depreciation?

Practice Questions

Q1
Which of the following is a method of calculating depreciation?
  1. Straight-line method
  2. Market value method
  3. Cost method
  4. Inventory method

Questions & Step-by-Step Solutions

Which of the following is a method of calculating depreciation?
  • Step 1: Understand what depreciation means. Depreciation is the reduction in value of an asset over time.
  • Step 2: Learn about different methods of calculating depreciation. There are several methods, but we will focus on the straight-line method.
  • Step 3: Know how the straight-line method works. This method spreads the cost of the asset evenly over its useful life.
  • Step 4: Identify the formula for the straight-line method. The formula is: (Cost of Asset - Salvage Value) / Useful Life.
  • Step 5: Apply the formula to calculate depreciation for an asset using the straight-line method.
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