Difference Between Shinking Fund Method And Annuity Method Of Depreciation

Here we are giving you the differences between Shinking Fund Method And Annuity Method Of Depreciation-

Sinking Fund Method	Annuity Method
1.       Depreciation charged is invested in outside securities	Not invested in outside securitites
2.       First interest is earned during second year and the first entry for investment of interest is made at the end of second year	Interest is earned from first day
3.       Actual interest is received	No interest received only adjustment takes place
4.       Depreciable amount will be calculated with the help of sinking fund table	Annuity table is created
5.       Depreciation charged is cost minus interest	Plus interest
6.       Amount of interest increases year by year	Decrease year after year
7.       Values of asset remain same	Value of assest decease