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Difference between SLM & WDV

Under diminis...

Question

Under diminishing balance method, depreciation___

A

Increases every year

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B

Remains constant

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C

Decreases every year

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D

None of the above

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Solution

The correct option is C
Decreases every year

Under the diminishing balance method of providing depreciation, it decreases every year.

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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.

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The annual depreciation charged under _______ method remains fixed during the life of asset, while it diminishes every year in ______ method

Q. Under which method of depreciation an amount of depreciation remains constant every year.

Q. Babu purchased on 1st April, 2016, a machine for ₹ 6,000. On 1st October, 2016, he also purchased another machine for ₹ 5,000. On 1st October, 2017, he sold the machine purchased on 1st April, 2016 for ₹ 4,000.
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