Section A: Theory of Financial Accounting
Question 4
(a) What is depreciation of an asset?
(b) List three causes of depreciation.
(c) Explain the following methods of depreciation:
(i) straight line;
(ii) reducing balance;
(iii) revaluation.
Observation
Majority of the candidates that attempted this question performed well in (a) and (b) but could not explained methods of depreciation. The expected answers to 4(c) included:
