Multiple choice

Which one is the formula for calculating depreciation?

  1. (Cost - Scrap Value) * Life of Assets

  2. (Cost - Scrap Value) / Life of Asset

  3. (Cost + Scrap Value) * Life of Asset

  4. (Cost + Scrap Value) / Life of Asset
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B Correct answer
Explanation

The formula for calculation of depreciation is (Cost - Scrap Value) / Life of Asset. The scrap value recovered after use of asset, so we need to deduct the net value to find the value of depreciation.

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