Practice question · Match the pairs
Match each depreciation method to its pattern.
- Straight-line
- Declining balance
- Units of production
- Impairment
- Equal charge every year
- Write-down when value drops below book
- Charge proportional to output
- Higher charge early, lower later
Hints
- Ask whether the cost is spread evenly, front-loaded, or usage-based.
- One item on the list is not a spreading method at all.
Show the answer
- Straight-line → Equal charge every year
- Declining balance → Higher charge early, lower later
- Units of production → Charge proportional to output
- Impairment → Write-down when value drops below book
Why
Three methods allocate cost over time; impairment recognises sudden loss. The choice should reflect how the asset delivers benefit, evenly, front-loaded, or per unit.
Practise Accounting for Assets
The app has 5 more questions on this lesson, and keeps your place in the course. Business I is free to start.
More questions on Accounting for Assets
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