Question 1

What is straight-line depreciation?

Accepted Answer

Straight-line depreciation spreads the cost evenly over the useful life: (cost - salvage value) / useful life. It is the simplest and most common method.

Question 2

What is declining balance depreciation?

Accepted Answer

Declining balance applies a constant rate to the remaining book value each year, resulting in larger deductions early and smaller ones later. It is used for tax acceleration.

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