3.4 Final Accounts Depreciation

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Last updated 6:55 PM on 4/10/26
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5 Terms

1
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Causes of depreciation of non-current (fixed) assets

Wear and tear
Obsolescence 

2
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Straight-line method of depreciation

A method used in accounting to calculate the fall in value of an asset evenly over its useful life.

3
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Straight-line method of depreciation Formula

Annual Depreciation = purchase price - residual price/estimated useful life

4
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Units of production method of depreciation

A method used in accounting to calculate the loss in value of an asset by estimating the units produced annually.

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Units of production method of depreciation (formula)

annual depreciation = yearly units of production/total estimated lifetime production x (original value of asset - residual price)