[amp_mcq option1=”Book value of a fixed asset” option2=”Market value of a fixed asset” option3=”Historical cost of a fixed asset” option4=”Recoverable amount if a fixed asset” correct=”option1″]
The correct answer is: A. Book value of a fixed asset
The book value of a fixed asset is the original cost of the asset minus the accumulated depreciation expenses of the asset. It is the amount that is recorded on the balance sheet as the value of the asset.
The cost of a fixed asset is the amount that is paid for the asset, including any installation or other costs that are necessary to make the asset ready for use. The accumulated depreciation expenses of a fixed asset are the total amount of depreciation that has been recorded for the asset over its lifetime. Depreciation is a way of accounting for the fact that assets lose value over time due to wear and tear.
The market value of a fixed asset is the price that the asset could be sold for in the open market. The historical cost of a fixed asset is the amount that was paid for the asset when it was originally purchased. The recoverable amount of a fixed asset is the amount that the asset is expected to be worth in the future.
In conclusion, the book value of a fixed asset is the original cost of the asset minus the accumulated depreciation expenses of the asset. It is the amount that is recorded on the balance sheet as the value of the asset.