Which of the following is NOT a method of depreciation?

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Question: Which of the following is NOT a method of depreciation?

Options:

Correct Answer: Cost Recovery Method

Solution:

The Cost Recovery Method is not a standard method of depreciation; it refers to recovering costs rather than a specific depreciation calculation.

Which of the following is NOT a method of depreciation?

Which of the following is NOT a method of depreciation?

Step 1: Understand what depreciation is. Depreciation is a way to account for the decrease in value of an asset over time.
Step 2: Learn about common methods of depreciation. Some standard methods include Straight-Line, Declining Balance, and Units of Production.
Step 3: Identify the term 'Cost Recovery Method'. This term refers to recovering costs rather than calculating depreciation.
Step 4: Compare the Cost Recovery Method with standard methods. Notice that it does not fit the definition of a depreciation method.
Step 5: Conclude that the Cost Recovery Method is NOT a standard method of depreciation.

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