Question

The method of depreciation under which depreciation is calculated on original cost of an asset is known as ____________ .

• A. Straight Line
• B. Original Cost
• C. Fixed Installment method.
• D. All of these

Answer 1

Answer: (D)

Option D is correct. The straight-line method is also known as the Original Cost method and Fixed Installment Method. Under the straight-line method, Depreciation is calculated on the original cost of an asset. That's why it is also known as the original cost method and every year a fixed amount of depreciation is charged from the asset. So it is known as the fixed instalment method.