Question

The method of depreciation adopted for mines is:
Reducing balance method
Annuity method
Straight line Method
Depletion method​

Answer 1

Answer:Depletion method of depreciation is most suitable for coal mine. This method is specially used for those assets which deplete with use. The cost of the asset is divided by total workable deposits

Explanation:

Depreciation is the reduction or the decrease in the value of fixed assets due to the normal wear and tear, efflux of time and obsolescence of technology. We use the word depreciation for the reduction in the value of fixed and tangible assets whereas amortization for the reduction in value of intangible assets. However, there are various Methods of Depreciation that an organization can adopt depending on its needs and circumstances. Let us study how to calculate depreciation.