alleryStart learning →Sum-of-years-digits assumes that assets are most productive when?
AThey are new
BThey are old
CThey are idle
DThey are sold
Answer & Solution
Correct answer: A. They are new
The method gives bigger charges early because assets are assumed more productive when new.
Keep practising Depreciation and Amortisation
Browse all Depreciation and Amortisation questions for CA Foundation, or explore more Accounting topics.
Related questions
How does depreciation expense affect the reported net income?Depletion is most used in which group of industries?Depletion is the using up of natural resources by which activity?Cost depletion allocates the cost of a resource in proportion to what?Pooling of similar assets bought in one year helps tax systems to?Buildings are generally given what depreciable lives under tax systems?For tax depreciation, bare land generally receives?A tax system that allows a fixed percentage of cost each year is called?