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4 cards from this section. Quick, good the night before a test.
What is the main purpose of depreciation?
Think about why businesses spread out the expense of an asset.
Define salvage value.
Consider what you could sell an asset for when it's no longer useful.
What is the Double Declining Balance Method?
Think about how depreciation accelerates under this method.
True or False: The Straight Line method allows for varying depreciation amounts.
Consider how consistency works in this method.
An asset costs ₹ 100,000 with a salvage value of ₹ 10,000 and a life of 5 years. Calculate the first-year depreciation using both methods, and suggest when you might switch methods.
Remember how each method calculates depreciation—compare your results!
If an asset depreciated under the DDB method leads to a book value of ₹ 2,000 while the salvage is ₹ 3,000, how should you adjust your method, and what calculation would you apply?
Revisit your formulas for switching methods!
5 more questions in this section. Enroll free to practise them all.
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