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Which method of depreciation spreads the cost of an asset evenly over its useful

Practice Questions

Q1
Which method of depreciation spreads the cost of an asset evenly over its useful life?
  1. Declining Balance Method
  2. Units of Production Method
  3. Straight-Line Method
  4. Sum-of-the-Years'-Digits Method

Questions & Step-by-Step Solutions

Which method of depreciation spreads the cost of an asset evenly over its useful life?
  • Step 1: Understand what depreciation means. It is the process of allocating the cost of a tangible asset over its useful life.
  • Step 2: Learn about different methods of depreciation. There are several methods, but we are focusing on one specific method.
  • Step 3: Identify the method that spreads the cost evenly. This method is called the Straight-Line Method.
  • Step 4: Know how the Straight-Line Method works. It divides the total cost of the asset by the number of years it is expected to be used.
  • Step 5: Realize that each year, the same amount of depreciation expense is recorded until the asset's cost is fully allocated.
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