The depreciation during the year 'n', in diminishing balance method of depreciation calculation, is calculated by multiplying a fixed percentage 'N' to the ?
Correct answer: D. Book value at the end of (n - 1)th year
- A. Initial cost
- B. Difference between initial cost and salvage value
- C. Depreciation during the (n - 1)th year
- D. Book value at the end of (n - 1)th year
Explanation
In the diminishing-balance method, depreciation is a fixed percentage of the asset’s opening book value for that year. The opening book value in year n is the value at the end of year n − 1.
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