MP Board · Class 11 · Accountancy · Depreciation, Provisions and ReservesUnder the Diminishing Balance Method, depreciation is calculated on:
Step-by-Step Solution
In the Diminishing Balance Method, depreciation is calculated on the written-down value (book value) of the asset at the beginning of each year.
Detailed Options Breakdown
Option : Original Cost
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Depreciation, Provisions and Reserves.
Option 1: Scrap Value
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Depreciation, Provisions and Reserves.
Option 2: Written Down Value (Correct Answer)
Correct choice. Refer to the step-by-step verified solution guidelines above for details.
Option 3: Market Value
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Depreciation, Provisions and Reserves.
💡 Study Guide: This question tests core syllabus concepts from Depreciation, Provisions and Reserves. For formulas, key summaries, and mock exam reference guides, read the full Depreciation, Provisions and Reserves Revision Notes.