Multiple choice

The value of an asset after deducting depreciation from the historical cost is known as

  1. fair value

  2. book value

  3. narket value

  4. net realisable value

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Book value (also called written down value or carrying amount) is the asset's historical cost less accumulated depreciation. It represents the net asset value shown on the balance sheet. Fair value is market-determined selling price, market value is what it could fetch in active markets, and net realizable value is estimated selling price less costs to sell. Book value is the accounting measure after depreciation.