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Which method of depreciation would likely result in the lowest book value at the

Practice Questions

Q1
Which method of depreciation would likely result in the lowest book value at the end of an asset's useful life?
  1. Straight-Line Method
  2. Declining Balance Method
  3. Units of Production Method
  4. All methods result in the same book value

Questions & Step-by-Step Solutions

Which method of depreciation would likely result in the lowest book value at the end of an asset's useful life?
  • Step 1: Understand what depreciation means. Depreciation is how we account for the decrease in value of an asset over time.
  • Step 2: Learn about different methods of depreciation. Common methods include Straight-Line, Declining Balance, and Units of Production.
  • Step 3: Focus on the Declining Balance Method. This method depreciates the asset more in the earlier years and less in the later years.
  • Step 4: Compare the Declining Balance Method to others. Since it takes more value away quickly, it results in a lower book value sooner.
  • Step 5: Conclude that at the end of an asset's useful life, the Declining Balance Method will show the lowest book value compared to other methods.
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