Question

Under which depreciation method :
Asset account continues to appear at its original cost year after year over its entire life.

• A. Straight line
• B. Weighted average
• C. Provision for depreciation
• D. None of the above

Answer 1

Answer: (C)

Provision for depreciation

There are two method of recording depreciation -

1. By charging to asset account - Under this method of recording depreciation, depreciation is directly credited to respective asset account result of which is that respective asset account appears at its book value less depreciation till date.

2. By creating Provision for depreciation/ Accumulated depreciation Account - Under this method of recording depreciation, depreciation is credited to the provision for depreciation account and as result respective asset account appears at its original cost.