Which depreciation method best matches the pattern by which the following contribute to income: 1. a building; 2. a motor vehicle?
A) 1. straight-line, 2. reducing-balance
B) 1. straight-line; 2. straight-line
C) 1. reducing-balance; 2. straight-line
D) 1. reducing-balance; 2. reducing-balance

Question

Quizplus · Accepted Answer

A building typically depreciates at a consistent rate over its useful life, making the straight-line method appropriate. A motor vehicle, however, tends to lose value more rapidly in the initial years, making the reducing-balance method a better fit.

Which Depreciation Method Best Matches the Pattern by Which the Following