Evaluate the following statements: S1. In the sum-of-the-years'-digits method, residual value is not used in the computations of depreciation expense. S2. Straight-line depreciation assumes equal usefulness in each time period, and the periodic charge
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.
46. Evaluate the following statements:
S1. In the sum-of-the-years'-digits method, residual value is not used in the computations of depreciation expense.
S2. Straight-line depreciation assumes equal usefulness in each time period, and the periodic charge is not affected by asset productivity or efficiency variations.
S3. The residual value of an asset is deducted from the
a. True, False, True
b. False, True, False
c. False, False, True
d. False, False, False
e. True, True, False
f. True, True, True
g. False, True, True
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