Which depreciation method is most suitable for assets that have a predictable pattern of usage?
Practice Questions
1 question
Q1
Which depreciation method is most suitable for assets that have a predictable pattern of usage?
Straight-line method
Declining balance method
Units of production method
Sum-of-the-years'-digits method
The straight-line method is most suitable for assets with a predictable pattern of usage, as it allocates costs evenly.
Questions & Step-by-step Solutions
1 item
Q
Q: Which depreciation method is most suitable for assets that have a predictable pattern of usage?
Solution: The straight-line method is most suitable for assets with a predictable pattern of usage, as it allocates costs evenly.
Steps: 5
Step 1: Understand what depreciation means. Depreciation is how we spread the cost of an asset over its useful life.
Step 2: Identify the types of depreciation methods. Common methods include straight-line, declining balance, and units of production.
Step 3: Learn about the straight-line method. This method spreads the cost of an asset evenly over its useful life.
Step 4: Recognize what a predictable pattern of usage means. It means the asset will be used consistently over time.
Step 5: Connect the straight-line method to predictable usage. Since the asset is used consistently, the straight-line method is a good fit because it matches the cost with the usage.
