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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.

Q. The amount of depreciation goes on decreasing in every year under the _________ method.

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.
It was decided that Depreciation @ 10% p.a. was to be written off every year under Diminishing Balance Method.
Assuming the accounts were closed on 31st March every year, show the Machinery Account for the years ended 31st March, 2017 and 2018.

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Difference between SLM & WDV

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