In which of the following depreciation methods is annual depreciation calculated as the difference between the asset's historical cost and its residual value,divided by the asset's useful life in years?

Question

Quizplus · Accepted Answer

The straight-line method calculates annual depreciation by dividing the difference between the historical cost and the residual value by the useful life of the asset. The double-declining-balance method uses a fixed rate of depreciation each year to accelerate the depreciation, while the units-of-production method calculates depreciation based on the asset's usage or production. Depletion is a method used in the natural resource industry to calculate the depreciation of assets such as oil wells or mines. Therefore, the best choice for this question is B, the straight-line method.

In Which of the Following Depreciation Methods Is Annual Depreciation