PRC-1 · Chapter 6 · Question 14 of 100
If an asset is temporarily idle and not used in production for several months, under which depreciation method will NO depreciation be charged for that specific period?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Units of production method
Explanation
The units of production method bases the depreciation charge entirely on the actual output or usage of the asset. Therefore, if the asset is idle (zero units produced), the depreciation charge is zero.
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