Principles of Accounting Volume 1
19th Edition
ISBN: 9781947172685
Author: OpenStax
Publisher: OpenStax College
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- Explain the historical cost concept as it applies to long-term operational assets. Why is the book value of an asset likely to be different from the current market value of the asset?arrow_forwardWhich of the following statements about capitalizing costs is correct? A. Capitalizing costs refers to the process of converting assets to expenses. B. Only the purchase price of the asset is capitalized. C. Capitalizing a cost means to record it as an asset. D. Capitalizing costs results in an immediate decrease in net income.arrow_forwardWhat is a relevant cost? Explain why depreciation on an existing asset is always irrelevant.arrow_forward
- The book value of an asset is equal to thea. Replacement cost.b. Asset’s cost less accumulated depreciation.c. Asset’s fair value less its historical cost.d. Historical cost plus accumulated depreciation.arrow_forwardWhich accounting concepts requires non-current assets to be valued at cost less accumulated depreciation, rather at their enforced saleable value a. Prudence b. Relevance c. Comparability d. Going concernarrow_forwardWhat is the difference between the cost of a fixed asset and its accumulated depreciation called? Group of answer choices book value current value fixed value equity valuearrow_forward
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