Asked by Alison Vidas on Jul 19, 2024
Verified
Which depreciation method ignores residual value when computing the depreciable base of an asset?
A) sum-of-the-years'-digits method
B) double-declining-balance method
C) composite method
D) group method
Depreciable Base
The cost of an asset less its salvage value, representing the total amount that can be depreciated over its useful life.
Residual Value
Residual value is the estimated value of an asset at the end of its useful life, reflecting what it could be sold for or its salvage value.
- Measure the depreciation employing an array of methods like double-declining balance, straight-line, and units-of-production techniques.
Verified Answer
ED
elijah davisJul 21, 2024
Final Answer :
B
Explanation :
The double-declining-balance method is an accelerated depreciation method that ignores the residual value of an asset when calculating its depreciable base. It applies a depreciation rate that is double the straight-line rate to the asset’s net book value at the beginning of each period. This results in higher depreciation expenses in the earlier years of the asset’s life, which reflects the asset’s higher wear and tear during those years.
Learning Objectives
- Measure the depreciation employing an array of methods like double-declining balance, straight-line, and units-of-production techniques.
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