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Cost of a fixed asset – Accumulated depreciation expenses of the fixed asset=?
- a)Book value of fixed asset
- b)Historical cost of a fixed asset
- c)Recoverable amount of a fixed asset
- d)Market value of fixed asset
Correct answer is option 'A'. Can you explain this answer?
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Cost of a fixed asset –Accumulated depreciationexpenses of the f...
Book value of fixed asset
The book value of a fixed asset is calculated by subtracting the accumulated depreciation expenses from the cost of the fixed asset. Accumulated depreciation is the total depreciation expense recognized for a fixed asset since it was acquired.
Calculation:
- Cost of a fixed asset: This is the original cost incurred to acquire the asset.
- Accumulated depreciation expenses: This is the total depreciation expense recognized for the fixed asset over its useful life.
Formula:
Book value of fixed asset = Cost of fixed asset - Accumulated depreciation expenses
The book value of a fixed asset is important for financial reporting purposes as it represents the amount of value that has not yet been depreciated. It is also used to determine the potential resale value of the asset.
The book value of a fixed asset is calculated by subtracting the accumulated depreciation expenses from the cost of the fixed asset. Accumulated depreciation is the total depreciation expense recognized for a fixed asset since it was acquired.
Calculation:
- Cost of a fixed asset: This is the original cost incurred to acquire the asset.
- Accumulated depreciation expenses: This is the total depreciation expense recognized for the fixed asset over its useful life.
Formula:
Book value of fixed asset = Cost of fixed asset - Accumulated depreciation expenses
The book value of a fixed asset is important for financial reporting purposes as it represents the amount of value that has not yet been depreciated. It is also used to determine the potential resale value of the asset.
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Cost of a fixed asset –Accumulated depreciationexpenses of the f...
Correct answer is A because when we are sell the assets then we are adding depreciation and expenses also when we are minus the these thigh we are getting book value of assets
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Cost of a fixed asset –Accumulated depreciationexpenses of the fixed asset=?a)Book value of fixed assetb)Historical cost of a fixed assetc)Recoverable amount of a fixed assetd)Market value of fixed assetCorrect answer is option 'A'. Can you explain this answer?
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