Which of the following is NOT a method of depreciation?
Practice Questions
1 question
Q1
Which of the following is NOT a method of depreciation?
Straight-Line Method
Declining Balance Method
Units of Production Method
Cost Recovery Method
The Cost Recovery Method is not a standard method of depreciation; it refers to recovering costs rather than a specific depreciation calculation.
Questions & Step-by-step Solutions
1 item
Q
Q: Which of the following is NOT a method of depreciation?
Solution: The Cost Recovery Method is not a standard method of depreciation; it refers to recovering costs rather than a specific depreciation calculation.
Steps: 5
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.
