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Question
In which of the following method, the asset appears at its original cost throughout its life?
In which of the following method, the asset appears at its original cost throughout its life?
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Solution
The correct option is D Depreciation fund
Option C is the correct one.
In the Depreciation Fund method every year, the fund invests an
amount of money equal to an existing asset's depreciation allowance in
gilt-edged securities, giving the company money that can be used to buy new
assets.
Option C is the correct one.
In the Depreciation Fund method every year, the fund invests an amount of money equal to an existing asset's depreciation allowance in gilt-edged securities, giving the company money that can be used to buy new assets.
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