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WAEC Financial Accounting 2024 Question 4

Question 4

Depreciation

Use the following information to answer questions 4 and 5.
The yearly depreciation charge using the straight line method is (X − Y)/Z
The letter X in the formula represents

  1. A.cost of the asset.
  2. B.accumulated depreciation.
  3. C.estimated useful life of the asset.
  4. D.rate of depreciation
Show the answer and explanation

Answer: A (cost of the asset.)

Explanation

Straight line = (cost − residual value) ÷ useful life, so X is the cost.