Book value:
A)is equivalent to market value for ﬁrms with non-current assets.
B)is based on historical cost.
C)generally tends to exceed market value when non-current assets are included.
D)is more of a ﬁnancial than an accounting valuation.
E)is adjusted to market value whenever the market value exceeds the stated book value.

Question

Quizplus · Accepted Answer

Book value is based on historical cost, meaning it reflects the original cost of assets as recorded in the financial statements. It does not necessarily reflect the current market value of assets, and may be lower or higher than market value depending on various factors.

Book Value