Accounting for IGCSE & O level - Accounting Procedures (Section 2 - No. 13)
Which of the following is an advantage of the reducing balance method?
It is relatively simple.
It reduces profit more in the first few years of use.
It allows for a constant depreciation charge each year.
It is suitable when the asset loses more value early in its useful life.
Explanation
The reducing balance method takes into account that assets lose more value earlier in their useful lives.
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