The Diminishing balance method means a method by which-

The rate of depreciation falls year by year

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The amount on which depreciation is calculated falls year by year

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The rate and amount which is applied falls year by year

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None of the above

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Solution

The correct option is B
The amount on which depreciation is calculated falls year by year

The Diminishing balance method means a method by which the amount on which depreciation is calculated falls year by year.

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Similar questions

Q. Assertion :Under diminishing balance method of depreciation, the charge for depreciation keeps on diminishing year after year in all subsequent years. Reason: Under diminishing balance method, the rate per cent at which depreciation is written off goes on diminishing year after year in all subsequent years.

___is a method of depreciation, in which the cost of the asset is spread uniformly over the life years by writing off a fixed amount every year, where as in ___ method of depreciation, a fixed rate of depreciation is charged on the book value of the asset over its useful life.

Q. Under sum of year digit method depreciation year by year ________.

A machine costing Rs. 55,000 has an expected useful life of 10 years. Depreciation is calculated on the diminishing balance method at the rate of 25%. At the end of year 5 the machine was actually disposed of for Rs. 15,000. (Depreciation is charged in all years 1 - 5). The resulting gain or loss is ...........

Q. Under which method of depreciation amount of depreciation changes every year.

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The Diminishing balance method means a method by which-

The correct option is B The amount on which depreciation is calculated falls year by year The Diminishing balance method means a method by which the amount on which depreciation is calculated falls year by year.

The correct option is B
The amount on which depreciation is calculated falls year by year

The Diminishing balance method means a method by which the amount on which depreciation is calculated falls year by year.