Assuming an asset has been fully depreciated according to its MACRS class life,which one of the following statements is correct?
A) Its market value is zero.
B) Its book value is zero.
C) Its book value is the current market value.
D) It has neither a book value nor a market value.

Question

Quizplus · Accepted Answer

When an asset has been fully depreciated according to its MACRS class life, its book value is zero, but it may still have market value. Market value is not affected by depreciation, whereas book value is the value of an asset as recorded in accounting records. However, choice A is incorrect because market value is not necessarily zero just because an asset is fully depreciated, and choice C is incorrect because book value is zero, not equal to market value. Choice D is also not correct because although the asset has no book value, it may still have market value.

Assuming an Asset Has Been Fully Depreciated According to Its