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WAEC Financial Accounting 2021 Question 8

Question 8

Depreciation

Reducing balance method charges depreciating as fixed percentage of the

  1. A.net book value of asset.
  2. B.cost of asset.
  3. C.market value of asset.
  4. D.accumulated depreciation on asset.
Show the answer and explanation

Answer: A (net book value of asset.)

Explanation

Each year's charge is a fixed percentage of the asset's reduced (net book) value.