{"id":8529,"date":"2024-04-15T03:02:02","date_gmt":"2024-04-15T03:02:02","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=8529"},"modified":"2024-04-15T03:02:02","modified_gmt":"2024-04-15T03:02:02","slug":"in-what-method-of-computing-depreciation-where-it-assumes-that-a-sinking-fund-is-established-in-which-funds-will-accumulate-for-replacement-purposes-a-straight-line-method-b-sinking-fund-method-c","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/in-what-method-of-computing-depreciation-where-it-assumes-that-a-sinking-fund-is-established-in-which-funds-will-accumulate-for-replacement-purposes-a-straight-line-method-b-sinking-fund-method-c\/","title":{"rendered":"In what method of computing depreciation where it assumes that a sinking fund is established in which funds will accumulate for replacement purposes? A. Straight line method B. Sinking fund method C. Sum-of-year digit method D. Declining balance method"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a9a1e630f236\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"false\">\r\n                    Straight line method                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"true\">\r\n                    Sinking fund method                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"false\">\r\n                    Sum-of-year digit method                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"false\">\r\n                    Declining balance method                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is: B. Sinking fund method.<\/p>\n<p>The sinking fund method is a depreciation method that assumes that a sinking fund is established in which funds will accumulate for replacement purposes. The annual depreciation expense is calculated as the difference between the cost of the asset and the estimated salvage value, divided by the estimated useful life of the asset. The depreciation expense is then deposited into a sinking fund, which is invested at a specified rate of return. The funds in the sinking fund are used to replace the asset at the end of its useful life.<\/p>\n<p>The sinking fund method is a conservative method of depreciation because it takes into account the cost of replacing the asset. <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div> However, it is also a more complex method of depreciation because it requires the calculation of the sinking fund balance and the investment rate of return.<\/p>\n<p>The other options are incorrect because they do not assume that a sinking fund is established.<\/p>\n<ul>\n<li>The straight line method is a depreciation method that assumes that the asset will be used evenly over its useful life. The annual depreciation expense is calculated as the cost of the asset divided by its estimated useful life.<\/li>\n<li>The sum-of-the-years-digits method is a depreciation method that assumes that the asset will be used more heavily in the early years of its useful life. The annual depreciation expense is calculated as the sum of the digits from 1 to the estimated useful life of the asset, divided by the sum of the digits from 1 to the remaining useful life of <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> the asset.<\/li>\n<li>The declining balance method is a depreciation method that assumes that the asset will be used more heavily in the early years of its useful life. The annual depreciation expense is calculated as a percentage of the book value of the asset, where the percentage is determined by a declining balance factor.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Join Our Telegram Channel Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[656],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>In what method of computing depreciation where it assumes that a sinking fund is established in which funds will accumulate for replacement purposes? A. Straight line method B. Sinking fund method C. Sum-of-year digit method D. Declining balance method<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/in-what-method-of-computing-depreciation-where-it-assumes-that-a-sinking-fund-is-established-in-which-funds-will-accumulate-for-replacement-purposes-a-straight-line-method-b-sinking-fund-method-c\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"In what method of computing depreciation where it assumes that a sinking fund is established in which funds will accumulate for replacement purposes? A. Straight line method B. Sinking fund method C. Sum-of-year digit method D. Declining balance method\" \/>\n<meta property=\"og:description\" content=\"Subscribe on YouTube\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/in-what-method-of-computing-depreciation-where-it-assumes-that-a-sinking-fund-is-established-in-which-funds-will-accumulate-for-replacement-purposes-a-straight-line-method-b-sinking-fund-method-c\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2024-04-15T03:02:02+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"In what method of computing depreciation where it assumes that a sinking fund is established in which funds will accumulate for replacement purposes? A. Straight line method B. Sinking fund method C. Sum-of-year digit method D. Declining balance method","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/in-what-method-of-computing-depreciation-where-it-assumes-that-a-sinking-fund-is-established-in-which-funds-will-accumulate-for-replacement-purposes-a-straight-line-method-b-sinking-fund-method-c\/","og_locale":"en_US","og_type":"article","og_title":"In what method of computing depreciation where it assumes that a sinking fund is established in which funds will accumulate for replacement purposes? A. Straight line method B. Sinking fund method C. Sum-of-year digit method D. Declining balance method","og_description":"Subscribe on YouTube","og_url":"https:\/\/exam.pscnotes.com\/mcq\/in-what-method-of-computing-depreciation-where-it-assumes-that-a-sinking-fund-is-established-in-which-funds-will-accumulate-for-replacement-purposes-a-straight-line-method-b-sinking-fund-method-c\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2024-04-15T03:02:02+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/in-what-method-of-computing-depreciation-where-it-assumes-that-a-sinking-fund-is-established-in-which-funds-will-accumulate-for-replacement-purposes-a-straight-line-method-b-sinking-fund-method-c\/","url":"https:\/\/exam.pscnotes.com\/mcq\/in-what-method-of-computing-depreciation-where-it-assumes-that-a-sinking-fund-is-established-in-which-funds-will-accumulate-for-replacement-purposes-a-straight-line-method-b-sinking-fund-method-c\/","name":"In what method of computing depreciation where it assumes that a sinking fund is established in which funds will accumulate for replacement purposes? A. Straight line method B. Sinking fund method C. Sum-of-year digit method D. Declining balance method","isPartOf":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#website"},"datePublished":"2024-04-15T03:02:02+00:00","dateModified":"2024-04-15T03:02:02+00:00","author":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209"},"breadcrumb":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/in-what-method-of-computing-depreciation-where-it-assumes-that-a-sinking-fund-is-established-in-which-funds-will-accumulate-for-replacement-purposes-a-straight-line-method-b-sinking-fund-method-c\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/exam.pscnotes.com\/mcq\/in-what-method-of-computing-depreciation-where-it-assumes-that-a-sinking-fund-is-established-in-which-funds-will-accumulate-for-replacement-purposes-a-straight-line-method-b-sinking-fund-method-c\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/exam.pscnotes.com\/mcq\/in-what-method-of-computing-depreciation-where-it-assumes-that-a-sinking-fund-is-established-in-which-funds-will-accumulate-for-replacement-purposes-a-straight-line-method-b-sinking-fund-method-c\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/exam.pscnotes.com\/mcq\/"},{"@type":"ListItem","position":2,"name":"mcq","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/mcq\/"},{"@type":"ListItem","position":3,"name":"Civil engineering","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/mcq\/civil-engineering\/"},{"@type":"ListItem","position":4,"name":"Engineering economics","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/mcq\/civil-engineering\/engineering-economics\/"},{"@type":"ListItem","position":5,"name":"In what method of computing depreciation where it assumes that a sinking fund is established in which funds will accumulate for replacement purposes? A. Straight line method B. Sinking fund method C. Sum-of-year digit method D. Declining balance method"}]},{"@type":"WebSite","@id":"https:\/\/exam.pscnotes.com\/mcq\/#website","url":"https:\/\/exam.pscnotes.com\/mcq\/","name":"MCQ and Quiz for Exams","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/exam.pscnotes.com\/mcq\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209","name":"rawan239","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/d97f17072bfa490596c8f78363955d55?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/d97f17072bfa490596c8f78363955d55?s=96&d=mm&r=g","caption":"rawan239"},"sameAs":["https:\/\/exam.pscnotes.com"],"url":"https:\/\/exam.pscnotes.com\/mcq\/author\/rawan239\/"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/8529"}],"collection":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/comments?post=8529"}],"version-history":[{"count":0,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/8529\/revisions"}],"wp:attachment":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/media?parent=8529"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/categories?post=8529"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/tags?post=8529"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}