8
Question
For providing depreciation on hand tools, the appropriate method of depreciation is ___________.
For providing depreciation on hand tools, the appropriate method of depreciation is ___________.
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Solution
The correct option is A Revaluation method
Revaluation method.Under revaluation method
of depreciation, the assets are revalued each year. The method is
normally adapted to charge depreciation on numerous inexpensive fixed assets
like small tools, livestock, patents, hand tools,copy rights and other assets
of such nature which are constantly changing and their period of life is most
uncertain. Accordingly periodic inventory is taken of usable items and valued
at cost irrespective of ruling prices. Excess of the opening over the closing
inventory thus gives the periodic depreciation expenses.
Revaluation method.
Under revaluation method of depreciation, the assets are revalued each year. The method is normally adapted to charge depreciation on numerous inexpensive fixed assets like small tools, livestock, patents, hand tools,copy rights and other assets of such nature which are constantly changing and their period of life is most uncertain. Accordingly periodic inventory is taken of usable items and valued at cost irrespective of ruling prices. Excess of the opening over the closing inventory thus gives the periodic depreciation expenses.
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