In which of the following methods, the cost of the asset is spread over in equal proportion during its useful economic life?
Correct answer: A. Straight-line method
- A. Straight-line method
- B. Written down value method
- C. Units-of-production method
- D. Sum-of-the years'-digits method
Explanation
The straight-line method allocates the depreciable amount in equal instalments over the asset’s useful economic life. The other listed methods produce changing depreciation amounts or depend on output.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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