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

Question

Quizplus · Accepted Answer

A building typically provides a consistent contribution to income over time, so a straight-line depreciation method would best match this pattern. On the other hand, a motor vehicle tends to lose value more quickly in the early years of use and then at a slower rate, which is more closely aligned with a reducing-balance depreciation method. Therefore, option C is the best fit for both assets.

Which Depreciation Method Best Matches the Pattern by Which 1