Question

If the annual depreciation charge on an asset for three years is Rs. $6000$, Rs. $5400$, Rs. $4860$. Discuss the method of depreciation followed by the company.

• A.
  • Sum-of-the-Years' Digits Method
• B.
  • Straight Line Method
• C. Written Down Value Method
• D. Unit of Production Method

Answer 1

The correct option is C Written Down Value Method

WDV (Written Down Value) is a method of depreciation in which a fixed rate of depreciation is charged on the book value of the asset, over its useful life. The amount of depreciation goes on decreasing every year. In the given question the amount of depreciation decreased in every year hence, company is following WDV method of depreciation.