4.3 - Illustration of Switching Process
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Practice Questions
Test your understanding with targeted questions
What is the main purpose of depreciation?
💡 Hint: Think about why businesses spread out the expense of an asset.
Define salvage value.
💡 Hint: Consider what you could sell an asset for when it's no longer useful.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the Double Declining Balance Method?
💡 Hint: Think about how depreciation accelerates under this method.
True or False: The Straight Line method allows for varying depreciation amounts.
💡 Hint: Consider how consistency works in this method.
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Challenge Problems
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An asset costs ₹ 100,000 with a salvage value of ₹ 10,000 and a life of 5 years. Calculate the first-year depreciation using both methods, and suggest when you might switch methods.
💡 Hint: Remember how each method calculates depreciation—compare your results!
If an asset depreciated under the DDB method leads to a book value of ₹ 2,000 while the salvage is ₹ 3,000, how should you adjust your method, and what calculation would you apply?
💡 Hint: Revisit your formulas for switching methods!
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