O-LevelAccountingAccounting principles and policies7707/12 · May/June 2022 · Q121 Mark
Which statement about the reducing balance method of depreciation is not correct?
Alower amount of depreciation is charged in the early years of the asset's life than in the later years.
BEach year a given percentage is deducted from the cost of the asset less the depreciation to date.
CIt is used for assets which give greater benefits in the early years of their life.
DThe net book value of the non-current asset will never reach a nil value.
✓ Correct answer
A: lower amount of depreciation is charged in the early years of the asset's life than in the later years.
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