Quiz 61: Declining Balance Method of Depreciation

Test your knowledge of double entry bookkeeping with our declining balance method of depreciation quiz.

Declining balance depreciation is one method of calculating the depreciation expense on long term assets such as property, plant, and equipment. The method is sometimes referred to as the reducing balance method or the diminishing balance method of depreciation.

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1. Using the declining balance method at a rate of 25% per year, what is the depreciation expense for year 2 on a asset costing 100,000?

2. If an asset costing 10,000 has a salvage value of 2,000, what is the depreciation expense for year 5 using the declining balance method at a rate of 20% ?

3. An asset costs 11,800 and has a salvage value of 2,800 after 5 years. What is the declining balance method depreciation rate%?

4. If an asset costing 16,000 is depreciated using the reducing balance method at the rate of 40%, what is the net book value of the asset at the end of year 2?

5. If an asset has a cost of 6,000 and a salvage value of 4,000, what is the reducing balance method depreciation expense for year 2 if the depreciation rate is 25% ?

6. If the reducing balance method depreciation rate used on an asset is 20%, what is the cost of the asset if the net book value at the end of year 1 is 9,600?

7. What is another name for the declining balance method?

8. Using the reducing balance method the depreciation expense each year is?

9. If an asset has a cost of 14,000 and a net book value at the end of year 1 of 11,900, what is the declining balance method depreciation rate applied?

10. If an asset costs 20,000 and is depreciated using the reducing balance depreciation method at a rate of 33%, what is the depreciation expense for year 5?

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About the Author

Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.

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