1. What are the Various concepts of Deprecation.

Question

Accepted Answer

Depreciation is the systematic allocation of the cost of an asset over its useful life.

Depreciation is a concept in accounting that recognizes the decline in value of an asset over time.
It is a non-cash expense that reduces the value of an asset on the balance sheet.
Depreciation methods include straight-line, declining balance, and units of production.
Straight-line depreciation allocates an equal amount of depreciation expense each year.
Declining balance depreciation front-loads the depreciation expense in the early years.
Units of production depreciation is based on the asset's usage or output.
For example, a company may depreciate a vehicle over 5 years using the straight-line method.
Another company may depreciate a building over 30 years using the declining balance method.
Depreciation is important for accurately reflecting the true value of assets and determining taxable income.

Accepted Answer

Straight Line Method, Written Down Value Method, Sum of Years Digits Method.

Popular interview questions of Accountant