3.4 Final Accounts HL

Question 1

Depreciation

Answer 1

• The value of assets decline over time
• Straight line depreciation
• Reducing balance depreciation

Question 2

Straight line depreciation

Answer 2

The amount decreased every year is constant

Annual dep. = (Original value - Expected residual value) / Years of product kept

250k annual dep.

Question 3

Reducing Balance Depreciation

Answer 3

The percent an assets decreases every year is kept constant

Depreciation rate X current value