Depreciation

Question 1

Two Methods of Depreciation:

Answer 1

• Straight line method
• Reducing/Diminishing method

Question 2

Straight line method:

Answer 2

Each accounting period is allocated a uniform portion of the cost of the non-current asset.
(Original C - Est Residual Val) / Estimated useful life

Question 3

Advantages of straight line:

Answer 3

• Simple to use
• More appropriate where the benefits from the asset are roughly equal in each period