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Group or composite depreciation applies a single rate to

  • A.each asset individually within a class
  • B.only the assets acquired in the current year
  • C.assets whose salvage value is zero
  • D.a collection of similar assets treated as one account

Answer: D

Correct answer: a collection of similar assets treated as one account

Group depreciation pools assets of similar life and type into a single account and applies one rate to the whole, which avoids tracking each item separately. Retirements are charged against the accumulated depreciation of the pool rather than computed individually, so no gain or loss is recognised on an ordinary disposal.

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