Amotor vehicle which cost £30,000 Is depreciated at 20% per annum using the reducing balance method. The depreciation charge for the second year would be: a. E13,800 b.£8,000 C. £4,800 24,000x20%-£4,800 d.£7,200

Q: Which statement is true?

A: Depreciation refers to the decrease in the value of a tangible asset over a period of time. There…

Q: For a vehicle that cost £40,000, had an estimated useful life of four years and an estimated scrap…

A: Depreciation is the amount which is to be reduced from value of assets to recognise the normal…

Q: 25 A machine costs R20 000. Depreciation will be written off at 20% per annum. Which one of the…

A: Given: Cost =R 20000 Depreciation rate =20%

Q: DT Ltd. provides you the following information: 1. Purchase price of machine Rs. 1,90,000 2.…

A: Discounted payback period is the period by which discounted cash flows are sufficient to cover all…

Q: A business buys a machine for £60,000 and depreciates it at 10% per annum by the reducing…

A: We have the following information: Cost of Machine: $60,000 Rate of depreciation: 10% per annum…

Q: n equipment costing 50,000 has a book value of 4,000 after 8yrs. The depreciation is computed by…

A: Depreciation is the decrease in value of assets over the period but the rate of depreciation is…

Q: A machine can be purchased for $230,000 and used for five years, yielding the following income. This…

A: The payback period is a financial metric used to evaluate the time it takes for an investment to…

Q: A machine costs P840,222 with a scrap value of 10% of the original price at the end of its life of 8…

A: Fixed asset: It is a long-term asset used in the business for long period and is depreciated for its…

Q: ABC’s property originally cost £300,000. After 10 years use it was revalued by £200,000. This…

A: Original Cost = 300000 Depreciation @ 2% 10 Years Depreciation = 300000*2%*10 = 60000

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.