How to book depreciation on fixed assets?

Question

Accepted Answer

Depreciation on fixed assets can be booked using various methods such as straight-line, reducing balance, and sum-of-the-years' digits.

Depreciation is the allocation of the cost of a fixed asset over its useful life.
Straight-line method charges an equal amount of depreciation each year.
Reducing balance method charges a higher amount of depreciation in the early years and lower in later years.
Sum-of-the-years' digits method charges a higher amount of depreciation in the early years and lower in later years.
Depreciation expense is recorded in the income statement and accumulated depreciation is recorded in the balance sheet.
Depreciation can be calculated manually or using accounting software.
Depreciation rates and useful lives of assets are determined by the company's accounting policies and regulations.

Top East India Udyog Senior Executive interview questions & answers