In computing depreciation salvage value is
A) the fair value of a plant asset on the date of acquisition.
B) subtracted from accumulated depreciation to determine the plant asset's depreciable cost.
C) an estimate of a plant asset's value at the end of its useful life.
D) ignored in all the depreciation methods.

Question

Quizplus · Accepted Answer

Salvage value is an estimate of a plant asset's value at the end of its useful life. It is subtracted from the cost of the asset to determine the depreciable cost, and is factored into the calculation of depreciation expense. The fair value of a plant asset on the date of acquisition is not related to salvage value and is not used in the calculation of depreciation expense. Depreciation methods do not ignore salvage value.

In Computing Depreciation Salvage Value Is