Engineering Board Exam Reviewer · Depreciation: Straight Line and Sinking Fund Methods · easy

Which depreciation method sets aside equal annual deposits into a fund that earns interest, such that the accumulated amount equals the total depreciation at the end of the asset's life?

  1. Sinking fund method
  2. Straight-line method
  3. Declining balance method
  4. Units-of-production method

Answer

A. Sinking fund method

Solution

This describes the sinking fund method.

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