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JAMB Principles of Accounts 2008 Question 19

Question 19

Depreciation

The factors that determine the periodic depreciation charge are

  1. A.asset cost, market value and useful life
  2. B.asset cost, market value and residual value
  3. C.asset value, cash value and useful life
  4. D.asset cost, salvage and useful life.
Show the answer and explanation

Answer: D (asset cost, salvage and useful life.)

Explanation

Depreciation per year = (cost − salvage value) ÷ useful life, so it depends on these three.