Question

Under Written down value method the basis of charging depreciation is __________.

• A. Net book value
• B. Original cost
• C. Net Realisable Value
• D. None

Answer 1

The correct option is A Net book value

Under written down value of method, depreciation calculated at a fixed percentage on the original cost in the first year and on the written down value, in subsequent years of a fixed depreciable asset. Under this method, the rate of depreciation remains constant year after year whereas the amount of depreciation goes on decreasing.