1.

Distinguish between Straight line method and Diminishing Balance method.

Answer»
Basis of Difference Straight Line MethodWritten Down value Method
Basis of charging depreciationOriginal CostBook value i.e. original cost less depreciation charged till date in this method,depreciation declines year after year
Annual depreciation chargeFixed (Constant) yearDeclines year after year
Total charge against profit and loss account respect of depreciation and repairsUnequal year after year. It increases in later years.Almost equal every year
Recognition by Income Tax lawNot recognisedRecognised


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