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WAEC Financial Accounting 2001 Question 22

Question 22

Depreciation

The depreciation method that allocates higher value to the use of an asset in its earlier years is

  1. A.diminishing balance method
  2. B.revaluation method
  3. C.fixed instalment method
  4. D.straight line method.
Show the answer and explanation

Answer: A (diminishing balance method)

Explanation

The reducing (diminishing) balance method charges more depreciation in early years.