{"id":8701,"date":"2024-04-15T03:04:49","date_gmt":"2024-04-15T03:04:49","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=8701"},"modified":"2024-04-15T03:04:49","modified_gmt":"2024-04-15T03:04:49","slug":"in-what-method-of-computing-depreciation-where-it-assumes-that-the-loss-in-value-is-directly-proportional-to-the-age-of-the-equipment-or-asset-a-straight-line-method-b-sinking-fund-method-c-sum-of","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/in-what-method-of-computing-depreciation-where-it-assumes-that-the-loss-in-value-is-directly-proportional-to-the-age-of-the-equipment-or-asset-a-straight-line-method-b-sinking-fund-method-c-sum-of\/","title":{"rendered":"In what method of computing depreciation where it assumes that the loss in value is directly proportional to the age of the equipment or asset? A. Straight line method B. Sinking fund method C. Sum-of-year digit method D. Declining balance method"},"content":{"rendered":"

[amp_mcq option1=”Straight line method” option2=”Sinking fund method” option3=”Sum-of-year digit method” option4=”Declining balance method” correct=”option4″]<\/p>\n

The correct answer is D. Declining balance method.<\/p>\n

The declining balance method is a depreciation method in which the depreciation expense is calculated as a fixed percentage of the asset’s book value. The percentage is applied to the book value each year, and the book value is reduced by the depreciation expense. This method results in a higher depreciation expense in the early years of the asset’s life and a lower depreciation expense in the later years.<\/p>\n

The declining balance method is often used for assets that have a short useful life, such as computers and automobiles. It is also used for assets that have a high salvage value, such as buildings.<\/p>\n

The other methods of computing depreciation are:<\/p>\n