Arrange the following in sequence while calculating depreciation using straight line method.
(A) Life of Asset
(B) Salvage Value of Asset
(C) Cost of Asset
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (C), (B), (A)
Under the straight line method the same amount is charged every year: the depreciable amount spread evenly over the life of the asset. The spreadsheet function SLN takes its three inputs in that same order, SLN(cost, salvage, life).
(C) Cost of Asset — first, since depreciation starts from what the asset cost to bring into use.
(B) Salvage Value of Asset — second, because it is deducted from the cost to give the total amount to be depreciated.
(A) Life of Asset — last, as the number of years over which that amount is spread.
Depreciation per year = (Cost − Salvage value) / Life in years
NCERT (2026-27 edition):
|
