Depreciation of non-current assets

Question 1

Straight line method

Answer 1

(cost - residue value ) / useful life

Question 2

Diminishing balance method

Answer 2

Depreciation rate % x carrying amount

Question 3

Units of production

Answer 3

(number of units / life in number of units) x (cost - residue value)

Question 4

Residual value

Answer 4

amount the asset is expected to be sold for at the end of its useful life

Question 5

carrying amount

Answer 5

value at which the asset is shown in the statement of financial position, calculated as the cost of the asset - accumulated depreciation

Question 6

accounting for depreciation

Answer 6

Reduces the carrying amount of the non-current assets on the SOFP by increasing accumulated depreciation on non-current asset

Accumulated depreciation (credit balance) 
non-current asset cost account (debit balance)

examples
Depreciation charges
- vehicle accumulated depreciation (debit)

Vehicle accumulated depreciation
- depreciation charges (credit)

Question 7

Depreciation adjustments

Answer 7

Depreciation charges (debit)

Accumulated depreciation (credit)