Accounting for IGCSE & O level - Accounting Procedures (Section 10 - No. 47)
Which of the following is an advantage of the reducing balance method?
It is simple to calculate.
It reflects the higher usage in the early years.
It results in lower depreciation expense in the early years.
It always matches the asset's market value.
Explanation
The reducing balance method recognizes higher expenses in the early period.
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