What is straight-line depreciation?

Depreciation BTEC Quiz

Quiz
•
Business
•
12th Grade
•
Hard
Cheryl Collier
Used 2+ times
FREE Resource
10 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
A method of allocating the cost of an asset based on its market value.
A method of increasing the cost of an asset over its useful life.
A method of allocating the cost of an asset evenly over its useful life.
A method of allocating the cost of an asset only in the first year of its useful life.
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How is the annual depreciation expense calculated using the straight-line method?
Cost of the asset multiplied by useful life
Cost of the asset divided by useful life
Cost of the asset plus useful life
Cost of the asset minus useful life
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What are the advantages of using straight-line depreciation?
It has no impact on financial statements
It makes calculation difficult and expenses unpredictable
It allows for easy calculation and predictable expenses over time.
It is only suitable for short-term assets
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What are the limitations of straight-line depreciation?
Limited accuracy in reflecting the actual decrease in value over time.
Can only be used for tangible assets.
No impact on the company's financial statements.
Unlimited accuracy in reflecting the actual decrease in value over time.
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is reducing balance depreciation?
A method of calculating depreciation where the asset's value decreases by a fixed percentage each year.
A method of calculating depreciation where the asset's value increases by a fixed percentage each year.
A method of calculating depreciation where the asset's value remains constant each year.
A method of calculating depreciation where the asset's value fluctuates based on market conditions.
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How is the annual depreciation expense calculated using the reducing balance method?
By adding a constant depreciation amount to the remaining book value of the asset each year.
By applying a variable depreciation rate to the original cost of the asset each year.
By applying a constant depreciation rate to the remaining book value of the asset each year.
By subtracting the original cost of the asset from the remaining book value each year.
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What are the advantages of using reducing balance depreciation?
Lower depreciation charges in the earlier years of an asset's life
Higher depreciation charges in the earlier years of an asset's life
No impact on the depreciation charges over the years
Reducing the value of the asset at a slower rate
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