Book value:
A) Is equivalent to market value for firms with fixed assets.
B) Is based on historical cost.
C) Generally tends to exceed market value when fixed 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 calculated based on the historical cost of an asset, less any depreciation, amortization, or impairment costs. It does not adjust to market value and is primarily an accounting measure rather than a financial valuation.

Book Value