Asked by Maryana Bilska on May 27, 2024
Verified
Which one of the following statements is not true?
A) Depreciation is the process of allocating the purchase price of an asset minus its residual value to expense for each period benefited by the asset.
B) The cost of an asset includes all acquisition costs necessary to obtain the benefits to be derived from the asset.
C) The service life of an asset is the measure of the number of years of service expected from the asset before its disposal.
D) The residual value of an asset is the difference between the expected book value of the asset at the end of its service and the costs of disposal.
Residual Value
The anticipated value an asset is expected to retain at the end of its useful life, often used in calculating depreciation.
Service Life
The expected period during which an asset is considered usable and economically feasible for its intended purpose.
- Understand the process and importance of computing depreciation for assets.
- Examine the role of residual value and useful life in influencing depreciation procedures.
Verified Answer
MA
Mohanad AbdulkareemMay 29, 2024
Final Answer :
D
Explanation :
The residual value of an asset is the estimated value of the asset at the end of its useful life, not the expected book value after depreciation and disposal costs are taken into account.
Learning Objectives
- Understand the process and importance of computing depreciation for assets.
- Examine the role of residual value and useful life in influencing depreciation procedures.