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Accountancy
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Directions: Choose the correct option for the given question.
Which of the following depreciation methods doesn't bring the value of asset to zero?
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A
Diminishing value method
💡 Explanation:
The Diminishing Value (or Declining Balance) method calculates depreciation as a percentage of the remaining book value each year. Since depreciation is always a percentage of a diminishing balance, the asset value approaches but never reaches zero - the depreciation amount gets progressively smaller each year.