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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

Book value is the

  1. (a) difference between market value and estimated value.
  2. (b) difference between market value and historical cost.
  3. (c) difference between original cost and salvage value.
  4. (d) difference between original cost and accumulated depreciation.

To determine

State the manner by which the book value is calculated.

Explanation

Book value:

The amount of acquisition cost of asset, less accumulated depreciation as on a particular date is referred to as book value.

Justification for the incorrect answer:

Option a &b:

The difference between the market value and the estimated value and the difference between the market value and historical cost helps in determining the profit or loss of an asset. Therefore, option a & b are incorrect answer.

Option c:

The difference between the original cost and the estimated value helps in determining the depreciable cost. Therefore, Option c is an incorrect answer...

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