Question

Under which of the following method depreciation is not charged uniformly?

• A. Fixed installation method.
• B. Sum of year digit method.
• C. Depreciation fund method.
• D. All of the above.

Answer 1

Answer: (B)

Sum of year digit method.

Sum of year digit number is calculated on the basis of remaining useful life of an asset.

For instance,if an asset's life is 5 years, the depreciation shall be charged in the following manner:

Year 1: 5/15=33.33%

Year 2: 4/5=26.67%

Year 3: 3/15=20%

Year 4: 2/15=13.33%

Year 5: 1/15=6.67%

Hence, the depreciation is not uniformly charged.

*15=1+2+3+4+5