Which of the following methods of depreciation calculations results in book values greater than those obtained with straight line method ?
Correct answer: B. Sinking fund method
- A. Multiple straight line method
- B. Sinking fund method
- C. Declining balance method
- D. Sum of the years digit method
Explanation
The sinking-fund method charges less depreciation in the early years, so its early book values remain higher than with straight-line depreciation. Declining-balance and sum-of-years-digits methods depreciate more heavily at the beginning.
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