Question

discuss the meaning and differences of Straight Line Method of Depreciation and Diminishing Balance Method of Depreciation with practical examples.

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Depreciation Methods

The four main types

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What Are the Main Types of Depreciation Methods?

There are several types of depreciation expense and different formulas for determining the book value of an asset. The most common depreciation methods include:

1.Straight-line

2.Double declining balance

3.Units of production

4.Sum of years digits

Depreciation expense is used in accounting to allocate the cost of a tangible asset over its useful life. In other words, it is the reduction in the value of an asset that occurs over time due to usage, wear and tear, or obsolescence.

Explanation:

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