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JAMB Principles of Accounts 2014 Question 16

Question 16

Depreciation

The formula for calculating depreciation using straight line method is

  1. A.(Scrap value + Sales)/Useful life.
  2. B.(Cost − Scrap value)/Useful life.
  3. C.(Sales − Scrap value)/Useful life.
  4. D.(Purchases + Sales)/Useful life.
Show the answer and explanation

Answer: B ((Cost − Scrap value)/Useful life.)

Explanation

Straight-line depreciation = (cost − scrap value) ÷ useful life.