The book value of an asset is equal to the asset's cost less accumulated depreciation. asset's fair value less its historical cost. blue book value relied on by secondary markets. replacement cost of the asset.

The book value of an asset is equal to the asset's cost less accumulated depreciation. asset's fair value less its historical cost. blue book value relied on by secondary markets. replacement cost of the asset.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 4DQ

See similar textbooks

Related questions

Q: receivables not measured initially at their transaction price are measured initially at a. fair…

A: Financial Asset or Receivables: The financial Asset or Receivables is measured initially at fair…

Q: practice, would you expect the depreciation expense for a non-current asset to be overestimated or…

A: Depreciation is charged for non current asset being tangible asset, because of its wearing and tear…

Q: The measurement of revaluation model is at: Fair value at the date of acquisition less any…

A: As per the INTERNATIONAL ACCOUNTING STANDARD Revaluation concept the measurement of Revaluation…

Q: 1)If an asset value recovers after an impairment loss has been recognized for the asset, what amount…

A: Since, you have posted more than one question, we will answer the first question for you. If you…

Q: 1. A company is deciding whether to exchange an old asset for a new asset. Within the context of the…

A: The situation described is the replacement decision for the old asset. Sunk cost is the cost that…

Q: The depreciation method used shall reflect the pattern in which the asset’s future economic benefits…

A: Depreciation is the method of accounting which assign the cost of the physical asset or the tangible…

Q: The total cost of an asset less its accumulated depreciation is called: Multiple Choice Historical…

A: Book value = Total cost of assets - Accumulated Depreciation

Q: What is the systematic periodic transfer of the cost of a fixed asset to an expense account during…

A: It is a measure of the wearing out, consumption or other loss of value of depreciable asset arising…

Q: It is the expected selling price of a property when the asset can no longer be used by its owner.…

A: Purchase value of assets is cost of assets purchase plus expenses incurred at the time purchase.

Q: The difference between book value of the asset with the proceeds received from its sale, will…

A: The book value of the asset is the cost of the asset less accumulated depreciation.

Q: When an impairment loss occurs, the carrying amount of the asset should be reduced to its a) ©…

A: Impairment: It implies to an increase in the fixed asset's carrying value in relation to the price…

Q: The book value of an asset is equal to the: a. asset's market value less its historical cost b.…

A: Book value is the net value of the assets that appears in balance sheet. it is calculated by…

Q: ‘carrying value’ of a depreciable asset is the difference between

A: Carrying value of an asset gives value of Company's asset as on given date after provision of wear…

Q: True or false If you sell an asset for more than its salvage value you can record a loss for the…

A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…

Q: Profit on sale of fixed assets arises when: Sale price is more than the original purchase value of…

A: Profit on the sale of fixed assets arises when the book value of the asset is less than the selling…

Q: The following terms are mismatched with its definitions. Match the terms to its correct definitions.…

A: The terms are matched with the definitions in below table:

Q: When market value of an asset is higher than book value, depreciation is not charged. A) True B)…

A: Meaning of depression. Depreciation is a reduction in the value of asset due to wear and tear,…

Q: The amount for which an asset could be exchanged, a liability settled , or an equity instrument…

A: The amount for which an asset could be exchanged, a liability settled , or an equity instrument…

Q: Question 1 Which of the following is not correct in relation to the reversal of an impairment loss…

A: Step 1 Impairment of the assets means the downward revaluation of the assets; whenever the carrying…

Q: When identifying undervalued and overvalued assets, which of the following statements is least…

A: While identifying whether the assets are undervalued or over valued, the required rate of return as…

Q: Impairment loss is a situation when Select one: a. Carrying amount of an asset is greater than…

A: The greater of the following two values are the recoverable amount of an asset: Fair value minus…

Q: Biological assets are measured as follows Initial…

A: The biological assets are the assets that include animals and plants.

Q: The book value of an asset is defined as ____________________. a. Estimated fair market value b.…

A: Book Value of an asset is the measure of the historical cost of an asset decreased by the total…

Q: Evaluate the consequences of depreciation charged on the historical cost of the assets. I)…

A: Please see the next step for the solution

Q: The book value of an asset is equal to thea. Replacement cost.b. Asset’s cost less accumulated…

A: Every asset has a limited period of life. With the continuous use of an asset in the course of…

Q: Which of the following best describes the higher of an asset's net selling price and its value in…

A: Asset's net selling price is the amount obtainable from the sale of assets less any disposal cost.…

Q: Vhen evaluatin Ing whethe netner an asset has been impaired, th the higher of O Initial Cost and…

A: 1) Impairment loss is the amount by which the carrying amount of an asset is exceeds its recoverable…

Q: A loss on impairment of an intangible asset under IFRS is the asset's: a. carrying amount less the…

Q: Which one of the following is not an advantage of leasing fixed asset? a. Repairs and maintenance…

A: The basic concept of lease contract is there are mainly two parties involving in this lease…

Q: the equation for book value is: book value = cost of an asset minus its accumulated depreciation.…

A: Asset: Asset is a resource owned by a company from which future economic benefits are expected to…

Q: The carrying amount of an item of property, plant and equipment that is subsequently accounted for…

A: The answer is option (3.) [ i.e, the historical cost less any accumulated depreciation and any…

Q: When a fixed asset is sold for less than book value, which one of the following will decrease?

A: Ratio Analysis: This refers to the performance measurement of the business, in order to know the…

Q: the best technique to use in valuing a tangible loss is: A) A replacement cost B) Market Values C)…

A: Tangible loss means the direct loss of money or property such as lost wages etc.

Q: As compared to capitalizing a cash expenditure, what is the initial effect on asset turnover of…

A: Asset Turnover Ratio: The total asset turnover ratio evaluates the efficiency of the organization…

Q: A) What is residual value? Support your answer with an example ( word count 100)

A: Lets understand the basic. When person purchase the asset they expected that after the useful life…

Q: Depreciation is a process of asset valuation where an asset's book value (cost less accumulated…

A: Depreciation is an accounting method of allocating the cost of tangible assets over its useful life.…

Q: purposes of capitalizing borrowing cost, a qualifying asset is an asset that necessarily takes a…

A: Inventory is the current asset posted in the balance sheet of the company. It does not use for…

Q: A gain or loss on the sale of a plant asset is determined by comparing the: A.…

A: Solution:- A gain or loss on the sale of a plant asset is determined as follows under:-

Q: 1. A company is deciding whether to exchange an old asset for a new asset. Within the context of the…

A: The questions are related to Cost Accounting. The Sunk costs are those historical cost that are…

Q: In a replacement analysis, the market value of the currently owned asset a. does not impact the cash…

A: With the passage of the time, old assets are outdated and more cost is incurred to maintain. So, it…

Q: What is an impairment loss? A ) The amount by which the carrying amount of an asset exceeds the…

A: An impairment loss is a recognized decrease in the par value of an asset caused by a deterioration…

Q: If a newly acquired asset is ‘held for sale’, the asset or disposal group will be measured at: A.…

A: Held for sale assets are those assets that are acquired for the purpose of sale in short period of…

Q: The fair value loss impairment model O calculates the impairment loss as the difference between the…

A: As per IFRS 9 on financial instruments the investment should record impairment as per the impairment…

Q: What is the difference between the cost of a fixed asset and its accumulated depreciation called?…

A: Accumulated depreciation is the total of all the depreciation that has been charged to the asset…

Q: Which is not an expense? A. costs of goods sold or services rendered B. loss on disposal of a…

A: Expense means the amount which is spent to for business purpose or for running the business. Expense…

Question

The book value of an asset is equal to the

asset's cost less accumulated depreciation.

asset's fair value less its historical cost.

blue book value relied on by secondary markets.

replacement cost of the asset.

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Explain the historical cost concept as it applies to long-term operational assets. Why is the book value of an asset likely to be different from the current market value of the asset?
The book value of an asset is equal to the: a. asset's market value less its historical cost b. book value relied on by secondary markets c. replacement cost of the asset d. asset's cost less accumulated depreciation
The book value of an asset is equal to thea. Replacement cost.b. Asset’s cost less accumulated depreciation.c. Asset’s fair value less its historical cost.d. Historical cost plus accumulated depreciation.
In a replacement analysis, the market value of the currently owned asset a. does not impact the cash flows of the replacement asset(s) in the opportunity cost approach b. does not impact the cash flows of the current asset in the cash flow approach if the current asset is kept c. is treated as a salvage value for the current asset in the cash flow approach if the current asset is kept d. is added to the first cost of the replacement asset(s) in the opportunity cost approach.
(Multiple Choice Question) An impairment loss is recorded when capital asset's 1. net book value is higher than the amount it could likely be sold for 2. market value is higher than its accumulated amortization 3. market value is higher than its net book value 4. net book value is higher than its accumulated amortization
When a fixed asset is sold for less than book value, which one of the following will decrease?
What is the difference between the cost of a fixed asset and its accumulated depreciation called? Group of answer choices book value current value fixed value equity value
The total cost of an asset less its accumulated depreciation is called: Multiple Choice Historical cost. Book value. Present value. Current (market) value. Replacement cost.
When market value of an asset is higher than book value, depreciation is not charged. A True B False
Profit on sale of fixed assets arises when: Sale price is more than the original purchase value of the asset Sale price is more than the depreciated value of the asset Sale price is more than the cumulative depreciation value of the asset Cumulative depreciation value is more than the current depreciated value of the asset
Which of the following payback methods assumes that the asset acquired may not last its estimated life. A. Traditional payback B. Present value payback C. Bail-out payback D. Payback reciprocal
Which of the following statements about capitalizing costs is correct?A. Capitalizing costs refers to the process of converting assets to expenses.B. Only the purchase price of the asset is capitalized.C. Capitalizing a cost means to record it as an asset.D. Capitalizing costs results in an immediate decrease in net income.