DEPRECIATION – EXAM PREPARATION SHEET
1. Most Important Definitions (2 marks)
1. Depreciation:
Reduction in the value of a fixed asset due to use, time, wear and tear, or obsolescence.
2. Scrap Value:
Estimated value of an asset at the end of its useful life.
3. Useful Life:
Period for which the asset is expected to be used.
4. Book Value:
Cost of the asset minus accumulated depreciation.
2. Important Short Questions (3 marks)
Be ready to write short answers for these:
1. Causes of Depreciation
2. Objectives of Depreciation
3. Difference between SLM and WDV
4. Why is depreciation charged every year?
5. What is obsolescence?
1. Most Important Definitions (2 marks)
1. Depreciation:
Reduction in the value of a fixed asset due to use, time, wear and tear, or obsolescence.
2. Scrap Value:
Estimated value of an asset at the end of its useful life.
3. Useful Life:
Period for which the asset is expected to be used.
4. Book Value:
Cost of the asset minus accumulated depreciation.
2. Important Short Questions (3 marks)
Be ready to write short answers for these:
1. Causes of Depreciation
2. Objectives of Depreciation
3. Difference between SLM and WDV
4. Why is depreciation charged every year?
5. What is obsolescence?
