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 whenever the market value of an asset changes.

Question

Quizplus · Accepted Answer

Book value is based on historical cost and reflects the value of assets as recorded on the balance sheet. It may not necessarily reflect the current market value of the assets, which can fluctuate over time. Book value is an accounting valuation and is not necessarily adjusted whenever the market value of an asset changes.

Book Value