The book value or carrying value of an asset is equal to:
A)its acquisition cost less the accumulated depreciation from the acquisition date to the balance sheet date.
B)its acquisition cost plus accumulated depreciation from the acquisition date to the balance sheet date.
C)the amount that could be obtained for the asset on the balance sheet date if it were sold.
D)the annual cost of carrying the asset in inventory.

Question

Quizplus · Accepted Answer

The book value or carrying value of an asset is the amount that remains after subtracting accumulated depreciation (which represents the portion of the asset's cost that has been allocated as an expense over its useful life) from the original acquisition cost. Therefore, option A is the correct answer as it subtracts accumulated depreciation from the acquisition cost. Option B adds accumulated depreciation and therefore overstates the carrying value. Option C refers to the fair market value of the asset rather than its book value or carrying value. Option D refers to the cost of inventory and is not relevant to the book value of an asset.

The Book Value or Carrying Value of an Asset Is