The ‘carrying value’ of a depreciable asset is the difference between ____? a.Depreciation and accumulated depreciationb.Cost and accumulated depreciationc. Cost and depreciationd. None of the above

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

Answered: ‘carrying value’ of a depreciable asset…

Business

Accounting

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

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter5: Adjusting Entries And The Work Sheet

Section: Chapter Questions

Problem 4TF: LO1 Depreciable cost is the difference between the original cost of the asset and its accumulated...

See similar textbooks

Related questions

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: An asset's book value or carrying value is its: Multiple Choice O accumulated depreciation. cost…

A: The book value or carrying value of the machine is the value that carries on the balance sheet of…

Q: The difference between cost of the asset and residual value is known as a . Depletion b . Salvage…

A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets…

Q: Statement 1: The cost of an asset, or other amount substituted for cost, less its residual value is…

A: An asset is depreciable till the level of residual value only. When the WDV of an assets comes to…

Q: Which of the following concepts is violated when measuring inventories at the lower of cost and net…

A: Solution: As per historical cost concept, in accounting value of an assets is recorded at original…

Q: Which one of the following category outstanding expenses belong to? a. Intangible asset b. Current…

A: Outstanding expenses are those expenses which have been incurred during the period but not yet paid.…

Q: Estimates of an asset's salvage value and usable life are used to determine depreciation costs. Is…

A: Different methods of depreciation are based on the useful life of the asset. However, one of the…

Q: Which of the following concepts is not related to depreciation? Select one: a. Historical cost…

Q: Allowable depreciation reduces the basis of an asset whether the depreciation is deducted or not.

A: Allowable depreciation is the depreciation of the asset which is must allowed to deduct from the tax…

Q: The process of transferring the cost of an asset to an expense account over time is called O A)…

A: Property, plant, and equipment: These assets are long lived economic resources which are owned by…

Q: at is the difference between depreciation and im

A: Depreciation: Depreciation is an accounting methodology of allocating the price of a tangible or…

Q: What element must be present when determining if an asset is a depreciating asset? a. An asset…

A: Depreciation is a reduction in the value of assets due to the usage of that asset. depreciating…

Q: Which of the following is not a factor that limits the service life of an asset? a. Operational use…

A: Service life can be limited due to physical causes and functional causes such as deterioration,…

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: Statement 1: The cost of an asset, or other amount substituted for cost, less its residual value is…

A: Depreciation: It implies to a reduction or fall in the value of fixed assets as a result of its…

Q: True or False: The loss in the market value of tangible fixed assets is referred to as depreciation.

A: Introduction: Depreciation is a source of pre-expense. It is applied to fixed assets over the…

Q: Why is the cost of certain kinds of property not recoverable at all by way of de-preciation,…

A: Cost of some assets are not recoverable because of the main reason that these assets do not qualify…

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: Which is not an expense? * costs of goods sold or services rendered loss on disposal of a…

A: Expense is the money spent in operations in order to generate revenues.

Q: If an asset that is not fully depreciated is sold or disposed, but the fixed asset records are not…

A: Fixed Asset: The asset used by company for more than one year is known as fixed asset. Fixed asset…

Q: A method that excludes residual value from the base for the depreciation calculation

A: Depreciation base: Depreciation base is the amount that is allocated over the estimated service…

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: 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 one of the following category outstanding expenses belong to? a. Intangible asset b. Current…

A: Outstanding expenses means those expenses which pertains to current period and recorded in the…

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: According to IAS 16 Property, Plant and Equipment, which, if any, of the following statements about…

A: - A change in depreciation method is the change in accounting estimate but not a change in…

Q: The depreciation increases the book value of equipment shown in the balance of its accumulated…

A: In accounting terms, depreciation is defined as the reduction of recorded value of a fixed asset in…

Q: When accounting for self-constructed PPE and computing the amount of interest cost to be…

A: Self constructed PPE are those Property, Plant and Equipment which is constructed by the business on…

Q: Depreciation is a process of: a. Asset devaluation b. Cost accumulation c. Cost allocation d.…

A: Depreciation is the process of cost allocation of an asset. It is made due to the wear and tear and…

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: PAS 16 defines depreciation as “the decrease in the value of an asset.”

A: With the passage of time, the value of assets goes on decreasing due to various reasons such as…

Q: Which statement about depreciation is false?a. A major objective of depreciation accounting is to…

A: Answer: Option b.

Q: Explain why depreciation on an existing asset is always irrelevant.

A: Fixed assets are those assets that are being held by the business for a longer period of time. For…

Q: The allocation of the cost of a tangible asset to expense in the periods in which the asset is used…

A: Tangible assets are physical assets of a company such as land, building, machine which is used to…

Q: The relevant factor(s) in computing depreciation include: A. Cost. B. Residual value. C. Useful…

A: Depreciation is a use of an asset. It is the value of an asset which has been utilized in the…

Q: In all cases, net property, plant and equipment (PP&E) should be calculated as the gross PP&E less…

A: Solution: Gross PP &E = Cost of purchase of PPE Accumulated depreciation = Depreciation…

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: 1. What are the three main factors used in determining depreciation of a fixed asset? 2. What is…

A: Depreciation systematically accounts for declines in the worth of a firm's assets over time. In the…

Q: The difference between the purchase cost of an asset and its value at the end of the life is known…

A: Introduction: Depreciation: Decreasing value of fixed assets over its useful life period called as…

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: ame depreciation methods that deduct residual value before an asset is deprecia

A: Solution: Following are depreciation methods that deduct residual value before an asset is…

Q: How does depreciation expense differ from other operatingexpenses?

A: Depreciation: It refers to a gradual decrease in the fixed asset’s value because of obsolescence,…

Q: Depreciation expense under the invenroty system is a. Based on cost minus residual value b.…

A: Depreciation = (Cost - Residual value) / Life of asset

Q: 1. It is a depreciation method based on the assumption that the value of a property is directl…

A: Note: “Since you have asked multiple question, we will solve the first question for you. If you want…

Q: Which of the following factors is NOT considered in determining the useful life of an intangible…

A: Intangible assets are assets that can not be seen or touched. Their effect can only be felt like…

Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

The ‘carrying value’ of a depreciable asset is the difference between ____?

Depreciation and accumulated depreciation

Cost and accumulated depreciation

c. Cost and depreciation

d. None of the above

Video Video

Expert Solution

This question has been solved!

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

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

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

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.
What is a relevant cost? Explain why depreciation on an existing asset is always irrelevant.
Which of the following accounts would not be included in the Acquisition and Payment for Long-Lived Assets Cycle? a. Revenue b. Depreciation expense c. Gain on disposal d. Equipment
Which of the following represents an event that is less routine when accounting for long-term assets? A. recording an asset purchase B. recording depreciation on an asset C. recording accumulated depreciation for an asset or asset category D. changing the estimated useful life of an asset
Explain the difference between depreciation, depletion, and amortization.
In all cases, net property, plant and equipment (PP&E) should be calculated as the gross PP&E less the accumulated depreciation. Choices: True or False
The book value of a depreciable asset is A. The original cost of the asset. B. The original cost of the asset less its accumulated depreciation. C. The original cost of the asset less its salvage value. D. The accumulated depreciation on the asset. E. None of these.
Depreciation expense under the invenroty system is a. Based on cost minus residual value b. Basically a FIFO approach to depreciable asset accounting c. The result of applying a depreciation rate to the original cost d. A measure of the change in the value of the depreciable asset
The cost of an asset that is subject to depreciation is called?
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.
The cost of a depreciable asset is referred to as the
Depreciation is a process of: a. Asset devaluation b. Cost accumulation c. Cost allocation d. Asset valuation