Question
What is the difference between Straight Line Method and Diminishing Balance Method of charging Depreciation? (Any two)
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Answer
- Under the Straight Line Method of Depreciation, Depreciation is uniform year after year whereas under the Written Down Value Method, it reduces every year.
- Depreciation under the Straight Line Method is calculated at a fixed percentage on the original cost whereas under the Written Down Value Method, it is calculated on original cost (in first year) and on written down value in subsequent years.
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