What method of depreciation allocates an equal amount of depreciation expense each year?
Practice Questions
1 question
Q1
What method of depreciation allocates an equal amount of depreciation expense each year?
Declining Balance Method
Units of Production Method
Straight-Line Method
Sum-of-the-Years'-Digits Method
The Straight-Line Method allocates an equal amount of depreciation expense each year over the useful life of the asset.
Questions & Step-by-step Solutions
1 item
Q
Q: What method of depreciation allocates an equal amount of depreciation expense each year?
Solution: The Straight-Line Method allocates an equal amount of depreciation expense each year over the useful life of the asset.
Steps: 5
Step 1: Understand what depreciation means. Depreciation is the process of allocating the cost of a tangible asset over its useful life.
Step 2: Learn about different methods of depreciation. There are several methods, but we are focusing on one specific method.
Step 3: Identify the method that allocates an equal amount each year. This method is called the Straight-Line Method.
Step 4: Know how the Straight-Line Method works. It spreads the total cost of the asset evenly over its useful life.
Step 5: Remember that with the Straight-Line Method, the same amount of depreciation expense is recorded every year until the asset is fully depreciated.
