Question

What are the limitations of the straight line method?

Answer 1

The straight line method has the following limitations:

1. It does not consider the loss of interest received for the amount invested in the asset.
2. It does not take into consideration that the depreciation on the asset will be more as it becomes old.
3. It ignores the actual use of the asset.

Also read:

• True and False Questions on Depreciation
• What Is Depreciation
• MCQs on Depreciation

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