Depreciation — true or false?

Exercise and reference answers

Questions

1. Statement is true

   Yes

   Statement

   Straight-line method spreads cost equally over useful life.

2. Statement is true

   Yes

   Statement

   Written-down value method writes off more in early years.

3. Statement is true

   No

   Statement

   Depreciation is a cash outflow each year.

4. Statement is true

   No

   Statement

   Land typically depreciates faster than buildings.