What is book value and on which financial statement is it reported?
A)Book value is the difference between accumulated depreciation and market value,and it is reported on the income statement.
B)Book value is the difference between historical cost and accumulated depreciation,and it is reported on the balance sheet.
C)Book value is the difference between depreciation expense and accumulated depreciation,and it is reported on the balance sheet.
D)Book value is the difference between historical cost and market value,and it is reported on the balance sheet.

Question

Quizplus · Accepted Answer

Book value is the value of an asset calculated by subtracting its accumulated depreciation from its historical cost. This value represents the remaining value of the asset that is yet to be depreciated. Since it is a balance sheet item, it is reported on the balance sheet. Option A is incorrect because book value does not take market value into consideration. Option C is incorrect because the difference between depreciation expense and accumulated depreciation is not the book value of the asset. Option D is incorrect because book value is not the difference between historical cost and market value, it is only based on historical cost and accumulated depreciation.

What Is Book Value and on Which Financial Statement Is