Why do companies use the straight line method?

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Solution

Companies use the straight line method as it is easier to use and results in fewer errors over the life of the asset. It is also the most convenient method of calculating depreciation.
Also read:
True and False Questions on Depreciation
What Is Depreciation
MCQs on Depreciation

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ABC Company provides the following information:

Cost of the equipment: Rs. 5,000
Salvage value: Rs. 500
Useful life of equipment: 10 years
Under straight line method, the yearly depreciation charge is:

Niranjan & Co has been charging depreciation @ 20% per annum on Straight Line Method. It now wants to change the method to diminishing balance method, the rate of depreciation being 35% per annum. Can the company do so?

Or
As per consistency concept, a company cannot change an accounting policy. Does this hold true in all instances? Explain.

A company sells an old delivery van for Rs8,000 at the end of the year. The company uses the straight-line depreciation method. The delivery van cost Rs30,000. The accumulated depreciation is Rs20,000. Which of the following is correct

Q. Straight line method and written down value method are generally used for calculating ____________ amount in practice.

A company purchased a vehicle for Rs 6000. It will be used for 5 years and its residual value is expected to be Rs 1000. What is the annual amount of deprecation using straight line method of depreciation?

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Why do companies use the straight line method?

Companies use the straight line method as it is easier to use and results in fewer errors over the life of the asset. It is also the most convenient method of calculating depreciation.Also read:True and False Questions on DepreciationWhat Is DepreciationMCQs on Depreciation

Companies use the straight line method as it is easier to use and results in fewer errors over the life of the asset. It is also the most convenient method of calculating depreciation.
Also read:
True and False Questions on Depreciation
What Is Depreciation
MCQs on Depreciation