Accounting for IGCSE & O level - Accounting Procedures (Section 12 - No. 37)
When using the straight-line method, what impact does the asset's salvage value have on depreciation expense?
It increases depreciation expense.
It decreases depreciation expense.
It has no impact on depreciation expense.
It is not factored into the depreciation calculations.
Explanation
The salvage value (the estimated value at the end of its useful life) is subtracted from the cost to determine the depreciable base.
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