The carrying amount of an asset is the difference between the
A)replacement cost of the asset and its historical cost.
B)cost of the asset and the amount of depreciation expense for the year.
C)cost of the asset and the accumulated depreciation to date.
D)proceeds received from the sale of the asset and its original cost.

Question

Quizplus · Accepted Answer

The carrying amount of an asset is calculated by subtracting the accumulated depreciation to date from the cost of the asset. This reflects the net book value of the asset on the balance sheet. Choice A is incorrect as replacement cost is not used in the calculation of carrying amount. Choice B is incorrect as it only accounts for depreciation expense for the current year and not the accumulated depreciation. Choice D is incorrect as it is not relevant to the calculation of carrying amount.

The Carrying Amount of an Asset Is the Difference Between