Question

Under which method of, depreciation annul depreciation goes on decreasing.

• A. Reducing balance method
• B. Straight line method
• C. Annuity method
• D. None

Answer 1

The correct option is A Reducing balance method

Under Reducing balance method the amount of annual depreciation goes on decreasing because the depreciation is calculated on the reduced balance of the asset.
Reducing balance of asset= Opening balance of asset in the previous year (-) depreciation for the previous year.