PRC-1 · Chapter 6 · Question 59 of 100
Which depreciation method will mathematically result in NO depreciation being charged for a period where the asset is left completely idle?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Units of production method
Explanation
The units of production (or machine hours) method calculates depreciation directly based on output. If output is zero (the asset is idle), the depreciation charge is zero.
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