BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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(Cost of Asset-Useful Life of Asset)/Salvage Value
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(Cost of Asset-Salvage Value)/Useful Life of Asset
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(Cost of Asset + Salvage Value)/Useful Life of Asset
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(Cost of Asset + Useful Life of Asset)/Salvage Value
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Detailed explanation-1: -It is calculated by simply dividing the cost of an asset, less its salvage value, by the useful life of the asset.
Detailed explanation-2: -The formula for calculating straight line depreciation is: Straight line depreciation = (cost of the asset – estimated salvage value) ÷ estimated useful life of an asset.
Detailed explanation-3: -Annual depreciation is equal to the cost of the asset, minus the salvage value, divided by the useful life of the asset.
Detailed explanation-4: -Straight-line depreciation: This is the most common method and is used to split the value of an asset evenly during its useful life. To calculate using the straight-line depreciation method: Subtract the salvage value from the asset cost. Divide that number by its useful life.