3) Which of the following best describes a depreciation base?7)The acquisition cost of an asset relative to its fair valueO The estimated market value of an asset at the end of its useful lifeO The historical cost of an asset less the depreciation recognized to dateO The amount that should be expensed over an asset's useful life

Answered: Which of the following best describes a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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3) Which of the following best describes a depreciation base?7)
The acquisition cost of an asset relative to its fair value
O The estimated market value of an asset at the end of its useful life
O The historical cost of an asset less the depreciation recognized to date
O The amount that should be expensed over an asset's useful life

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The deprecitation is a type of non-monetary expense for the company as it does not include any cash outflow. The depreciation means the decrease in the value of the asset over a time period of use. Generally, the depreciation is charged on the asset a fixed year and it is charged at the end of the financial year. The amount of the depreciation is subtracted from the value of the assets to find out the correct value book value of the asset. The amount of the depreciation is shown on the asset side of the balance sheet under the asset.

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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

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