The depreciation on an asset purchased through hire purchase should be:
A)should be straight line only
B)based on the cost price of the asset only
C)based on the total cost including interest
D)no depreciation should be provide until the final payment is made

Question

Quizplus · Accepted Answer

Depreciation on an asset purchased through hire purchase should be based on the cost price of the asset only. The interest component is treated separately as a finance cost and does not affect the depreciable amount of the asset.

The Depreciation on an Asset Purchased Through Hire Purchase Should