Q.A machine costing ₹50,000 has an estimated life of 5 years and a scrap value of ₹5,000. Compare the depreciation charged and the closing book value at the end of Year 1 and Year 2 under

The correct matching is (1)-(iii), (2)-(iv), (3)-(i), (4)-(ii), which is option (d).

Matching each depreciation method to its feature:

• (1) Straight line method → (iii) Depreciation is constant for every year. A fixed amount is written off each year on the original cost.

• (2) Diminishing balance method → (iv) Depreciation is decreasing every year. Depreciation is charged on the reducing book value, so the amount falls each year.

• (3) Annuity method → (i) Depreciation is calculated on the basis of the Annuity table. It considers interest on the capital invested in the asset using annuity tables.

• (4) Revaluation method → (ii) Depreciation is calculated by comparing the value of assets at the end of the year with their value at the beginning. Used for small/loose items like tools and livestock.

With the same rate, SLM and WDV depreciation are equal in year 1 but SLM becomes higher than WDV in later years.

Compare the two methods at the same rate of depreciation:

• Straight Line Method (SLM): depreciation = rate × original cost every year, so the amount stays constant.
• Written Down Value Method (WDV): depreciation = rate × book value (reducing balance), so the amount decreases each year.

First year: both are calculated on the same original cost, so the depreciation amounts are equal.

Subsequent years: SLM continues on the full cost (unchanged), whereas WDV is charged on a smaller written-down balance, so the WDV amount falls. Therefore the SLM amount becomes higher than the WDV amount from the second year onwards.

Example (cost ₹1,00,000, rate 10%):

Equal in year 1, then SLM is higher. This is from the Depreciation Accounting chapter of the Tamil Nadu HSC Class-11 Accountancy syllabus.

Under the Straight Line Method, depreciation is a fixed, equal amount every year — it is constant for all years (option a).

How SLM works:

• Annual depreciation = (Cost of asset − Residual/Scrap value) ÷ Estimated useful life.
• This formula gives the same amount every year, because it is charged on the original cost, which does not change.
• Hence the depreciation is a straight, level charge across the whole life of the asset — plotting it against time gives a horizontal line, which is why it is called the straight line method.

By contrast, under the Written Down Value method depreciation is charged on the reducing book value, so it decreases every year. Under SLM it stays constant.