BUSINESS ADMINISTRATION
BUSINESS MATHEMATICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The difference between cost and scrap value
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The difference between the actual cost and the accumulated depreciation charged until the date
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The difference between the actual cost and the annual depreciation
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The difference between the actual cost and the total depreciation
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Detailed explanation-1: -To calculate the book value of an item, subtract the accumulated depreciation from the original cost of the item. Accumulated depreciation refers to the total decline in value over the years in which the item was used. The formula to calculate book value is: Book Value = Cost-Accumulated Depreciation.
Detailed explanation-2: -The difference between the cost of an asset and its accumulated depreciation is its book value.
Detailed explanation-3: -What Is Book Value? Book value is equal to the cost of carrying an asset on a company’s balance sheet, and firms calculate it by netting the asset against its accumulated depreciation.
Detailed explanation-4: -The total depreciation is calculated only after deducting the actual salvage value. The book value is calculated by the process of subtracting the accumulated depreciation (it is the total depreciation amount that is incurred up to a point of calculation of the book value) from the total cost of an asset.