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The value of the property during its useful life based on the purchase value and depreciation etc. is known as:
- a)Junk value
- b)Salvage value
- c)Scrap value
- d)Book value
Correct answer is option 'D'. Can you explain this answer?
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The value of the property during its useful life based on the purchase...
Book value is the value of asset recorded on the accounting books of the firm at a given time period. It is generally calculated at the end of each year. Book value at the end of a given year equals the initial cost less the total depreciation amount till that year.
Salvage value represents estimated market value of the asset at the end of its useful life. It is the expected cash inflow that the owner of the asset will receive by disposing it at the end of useful life.
Useful life represents the expected number of years the asset is useful in terms of generating revenue. The asset may still be in working condition after the useful life but it may not be economical. Useful life is also known as depreciable life. The asset is depreciated over its useful life. Scrap Value implies that the asset has no further useful life.
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The value of the property during its useful life based on the purchase...
Book value refers to the value of a property during its useful life based on its purchase value, depreciation, and other factors. Here are some key points to understand about book value:
• Book value is a financial term that is used to determine the value of an asset on a company's balance sheet.
• It takes into account the original purchase price of the asset, any depreciation that has occurred over time, and any other factors that may impact the value of the asset.
• Book value is often used to determine the value of a company's assets, liabilities, and equity.
• In the case of real estate, book value is used to determine the value of a property based on its purchase price, any improvements that have been made, and any depreciation that has occurred over time.
• Book value is not the same as market value, which is the price that a property would fetch if it were sold in the current market.
• Book value is useful for accounting and financial purposes, but it may not accurately reflect the true value of a property in the current market.
Overall, book value is an important concept for understanding the financial value of assets, including real estate. While it may not provide an accurate reflection of a property's current market value, it is a useful tool for accounting and financial analysis.
• Book value is a financial term that is used to determine the value of an asset on a company's balance sheet.
• It takes into account the original purchase price of the asset, any depreciation that has occurred over time, and any other factors that may impact the value of the asset.
• Book value is often used to determine the value of a company's assets, liabilities, and equity.
• In the case of real estate, book value is used to determine the value of a property based on its purchase price, any improvements that have been made, and any depreciation that has occurred over time.
• Book value is not the same as market value, which is the price that a property would fetch if it were sold in the current market.
• Book value is useful for accounting and financial purposes, but it may not accurately reflect the true value of a property in the current market.
Overall, book value is an important concept for understanding the financial value of assets, including real estate. While it may not provide an accurate reflection of a property's current market value, it is a useful tool for accounting and financial analysis.
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The value of the property during its useful life based on the purchase value and depreciation etc. is known as:a)Junk valueb)Salvage valuec)Scrap valued)Book valueCorrect answer is option 'D'. Can you explain this answer?
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