CA Foundation Exam > CA Foundation Videos > Principles and Practice of Accounting > Straight line method, Written down value & Sum of years digit method
Straight line method, Written down value & Sum of years digit method Video Lecture | Principles and Practice of Accounting - CA Foundation
|
68 videos|160 docs|83 tests
|
FAQs on Straight line method, Written down value & Sum of years digit method Video Lecture - Principles and Practice of Accounting - CA Foundation
| 1. What is the straight-line method of depreciation? |  |
Ans. The straight-line method of depreciation is a commonly used accounting method to allocate the cost of an asset evenly over its useful life. Under this method, the depreciation expense is calculated by dividing the difference between the asset's initial cost and its salvage value by the number of years of its useful life.
| 2. What is the written down value method of depreciation? | |
Ans. The written down value method of depreciation, also known as the reducing balance method, is an accounting technique used to calculate the depreciation expense of an asset. In this method, the depreciation is applied to the asset's net book value (cost minus accumulated depreciation) at a constant rate. As the asset's value decreases over time, the depreciation expense also decreases.
| 3. How is the sum of years digit method of depreciation calculated? | |
Ans. The sum of years digit method of depreciation is a technique to calculate the depreciation expense of an asset based on its useful life. To calculate the depreciation under this method, you need to add the digits of the asset's useful life and then allocate the depreciation expense based on the proportion of each digit to the total sum of digits. For example, if an asset has a useful life of 5 years, the sum of the digits would be 15 (1+2+3+4+5), and the depreciation expense would be allocated accordingly.
| 4. What are the advantages of using the straight-line method of depreciation? | |
Ans. The straight-line method of depreciation offers several advantages, including simplicity and ease of calculation. It provides a consistent and predictable depreciation expense over the asset's useful life, making it easier for companies to budget and plan for future expenses. Moreover, this method is widely accepted and recognized, making it easier for financial reporting and comparisons across companies.
| 5. How does the choice of depreciation method affect financial statements? | |
Ans. The choice of depreciation method can have an impact on a company's financial statements. The straight-line method typically results in a more even distribution of depreciation expenses over time, which can lead to a smoother income statement and more stable net income. On the other hand, the written down value method may result in higher depreciation expenses in the earlier years, impacting profitability. The choice of method can also affect the balance sheet, as it influences the carrying value of the asset and its impact on equity.
Related Exams
About this Video
|
4.77/5 Rating |
|
Nov 21, 2024 Last updated |
Video Description: Straight line method, Written down value & Sum of years digit method for CA Foundation 2024 is part of Principles and Practice of Accounting preparation.
The notes and questions for Straight line method, Written down value & Sum of years digit method have been prepared according to the CA Foundation exam syllabus.
Information about Straight line method, Written down value & Sum of years digit method covers all important topics for CA Foundation 2024 Exam.
Find important definitions, questions, notes, meanings, examples, exercises and tests below for Straight line method, Written down value & Sum of years digit method.
Introduction of Straight line method, Written down value & Sum of years digit method in English is available as part of our Principles and Practice of Accounting for CA Foundation & Straight line method, Written down value & Sum of years digit method in
Hindi for Principles and Practice of Accounting course. Download more important topics related with notes, lectures and mock test series for
CA Foundation Exam by signing up for free.
Description
Video Lecture & Questions for Straight line method, Written down value & Sum of years digit method Video Lecture | Principles and Practice of Accounting - CA Foundation - CA Foundation full syllabus preparation | Free video for CA Foundation exam to prepare for Principles and Practice of Accounting.
Information about Straight line method, Written down value & Sum of years digit method
Here you can find the meaning of Straight line method, Written down value & Sum of years digit method defined & explained in the simplest way possible.
Besides explaining types of Straight line method, Written down value & Sum of years digit method theory, EduRev gives you an ample number of questions to practice Straight line method, Written down value & Sum of years digit method tests,
examples and also practice CA Foundation tests.
|
68 videos|160 docs|83 tests
|
|
Explore Courses for CA Foundation exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
Related Searches
Written down value & Sum of years digit method Video Lecture | Principles and Practice of Accounting - CA Foundation
,past year papers
,study material
,video lectures
,shortcuts and tricks
,Written down value & Sum of years digit method Video Lecture | Principles and Practice of Accounting - CA Foundation
,mock tests for examination
,practice quizzes
,Free
,MCQs
,Previous Year Questions with Solutions
,Semester Notes
,ppt
,Objective type Questions
,Viva Questions
,Exam
,Important questions
,Extra Questions
,Straight line method
,Written down value & Sum of years digit method Video Lecture | Principles and Practice of Accounting - CA Foundation
,Sample Paper
,Straight line method
,Summary
,Straight line method
;
Study Straight line method, Written down value & Sum of years digit method on the App
Students of CA Foundation can study Straight line method, Written down value & Sum of years digit method alongwith tests & analysis from the EduRev app,
which will help them while preparing for their exam. Apart from the Straight line method, Written down value & Sum of years digit method,
students can also utilize the EduRev App for other study materials such as previous year question papers, syllabus, important questions, etc.
The EduRev App will make your learning easier as you can access it from anywhere you want.
The content of Straight line method, Written down value & Sum of years digit method is prepared as per the latest CA Foundation syllabus.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup