Multiple choice

If depreciation is charged, the balance in the asset account can reduce to zero in case of

  1. diminishing balance method

  2. reducing instalment system

  3. fixed instalment method

  4. none of these

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

 In this method, the balance in the asset account would reduce to nil at the expiry of working life, as the depreciation is charged on original cost.