What is the formula for calculating straight-line depreciation?

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Question: What is the formula for calculating straight-line depreciation?

Options:

Correct Answer: Cost - Salvage Value / Useful Life

Solution:

The straight-line depreciation formula is (Cost - Salvage Value) / Useful Life.

What is the formula for calculating straight-line depreciation?

What is the formula for calculating straight-line depreciation?

Step 1: Identify the initial cost of the asset. This is how much you paid for it.
Step 2: Determine the salvage value. This is the estimated value of the asset at the end of its useful life.
Step 3: Find out the useful life of the asset. This is how long you expect to use it, usually measured in years.
Step 4: Subtract the salvage value from the initial cost. This gives you the total amount that will be depreciated.
Step 5: Divide the result from Step 4 by the useful life. This gives you the annual straight-line depreciation expense.

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