London Ltd bought a computer system two years ago for $50,000.They are amortizing it using the straight-line method over five years.At the end of the second year what is the computer system's net book value (NBV)?
A)$10,000
B)$20,000
C)$30,000
D)$50,000

Question

Quizplus · Accepted Answer

The straight-line method means the computer system is being amortized equally over five years, meaning $50,000/5 = $10,000 is being amortized each year. 
After two years, $10,000 x 2 = $20,000 has been amortized. Therefore, the net book value after two years is $50,000 - $20,000 = $30,000. So, the correct answer is C.

London Ltd Bought a Computer System Two Years Ago for $50,000.They