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VICAccountingQuick questions
Unit 3: Financial accounting for a trading business
Quick questions on Depreciation of non-current assets (VCE Accounting Unit 3)
3short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is straight-line method?Show answer
The straight-line method charges an equal amount each period:
What is reducing balance method?Show answer
The reducing balance method applies a fixed percentage to the carrying amount (cost less accumulated depreciation):
What is reducing balance at 25 percent?Show answer
Year 1 depreciation = 40,000 times 25 percent = 10,000 dollars. Carrying amount = 30,000 dollars. Year 2 depreciation = 30,000 times 25 percent = 7,500 dollars. Accumulated depreciation after two years = 10,000 plus 7,500 = 17,500 dollars and carrying amount = 22,500 dollars.
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