Question

The method of determining depreciation that yields successive reductions in the periodic depreciation charge over the estimated life of the asset is the:
a. time-valuation method
b. units-of-production method
c. straight-line method
d. double-declining-balance method

Answer 1

"Double-declining-balance method" is the method that determines "depreciation" yields successive reductions in the "periodic depreciation" change over the expected "life of the asset".

Option: D

Explanation:

"Double declining balance method" is a form of "an accelerated depreciation method" in which "the asset value" is "depreciated" at "twice the rate" it is performed in the straight-line steps. Since the depreciation is performed at a faster rate (twice to be precise) of the "straight-line method" it is named as accelerated depreciation. This method of determining depreciation results into successive decrement in the periodic reduction charge over the approximate life of the property.

DDB depreciation Formula:

Depreciation=2×SLDP×BV