The net book value of a fixed asset is determined by the original cost
A) less accumulated depreciation
B) less market value
C) less accumulated depreciation plus depreciation expense
D) plus accumulated depreciation

Question

Quizplus · Accepted Answer

The net book value of a fixed asset is determined by subtracting the accumulated depreciation from the original cost. This calculation reflects the total amount of cost that has not yet been expensed and remains on the books as an asset. Market value is not used in determining net book value, nor is depreciation expense (which is used to calculate accumulated depreciation). Adding accumulated depreciation would result in a higher value than the original cost, which does not reflect the true value of the asset.

The Net Book Value of a Fixed Asset Is Determined