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Limitations of straight line method
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Limitations of straight line method Related: Chapter Notes - Deprecia...
Limitations of Straight Line Method
Even though the straight line method is simple and easy to apply it suffers from certain limitations which are given below:
This method is based on the faulty assumption of same utility of the asset in different accounting years;
As the years go by the work efficiency of the asset decreases and repair and maintenance expense increases. Hence, under this method total amount charged against profit on account of depreciation and repair taken together will not be uniform throughout the life of the asset, rather it will keep on increasing from year to year.
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Limitations of straight line method Related: Chapter Notes - Deprecia...
By this method the value of assets becoming zero and it is impossible
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Limitations of straight line method Related: Chapter Notes - Depreciation, Provisions and Reserves - Accountancy, Class 11
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Limitations of straight line method Related: Chapter Notes - Depreciation, Provisions and Reserves - Accountancy, Class 11 for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Limitations of straight line method Related: Chapter Notes - Depreciation, Provisions and Reserves - Accountancy, Class 11 covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Limitations of straight line method Related: Chapter Notes - Depreciation, Provisions and Reserves - Accountancy, Class 11.
Limitations of straight line method Related: Chapter Notes - Depreciation, Provisions and Reserves - Accountancy, Class 11 for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Limitations of straight line method Related: Chapter Notes - Depreciation, Provisions and Reserves - Accountancy, Class 11 covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Limitations of straight line method Related: Chapter Notes - Depreciation, Provisions and Reserves - Accountancy, Class 11.
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