Q.From the following particulars prepare Machinery account for 2 years under Straight Line method of providing depreciation.
Machinery was purchased on 01.01.2022
Price of the machine ₹ 40,000
Life of the machine 5 years

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. …

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%):

…

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. …