Which formula represents the straight-line depreciation method?

The straight-line depreciation method is commonly used in accounting to allocate the cost of a tangible asset over its useful life. The correct formula for this method is (Cost - Salvage Value) / Useful Life.

In this formula, "Cost" refers to the initial purchase price of the asset, and "Salvage Value" is the estimated resale value at the end of its useful life. By subtracting the salvage value from the cost, you determine the total amount that will be depreciated over the asset’s lifespan. Dividing this figure by the "Useful Life" of the asset, which is the estimated duration the asset will be in service, gives you the annual depreciation expense.

This method is straightforward and easy to apply, making it a popular choice among businesses. It assumes that the asset will lose value evenly over time, which fits standard accounting practices. The other formulas do not convey this fundamental approach to calculating depreciation properly.