Which of the following situations is impossible?
A)Book value is greater than residual value.
B)Book value is equal to the residual value.
C)Book value is less than residual value.
D)Book value is less than the original cost.

Question

Quizplus · Accepted Answer

Book value, which is the original cost minus accumulated depreciation, cannot be less than the residual (or salvage) value, as the residual value is the estimated amount for which an asset can be sold at the end of its useful life and depreciation does not reduce the book value below this point.

Which of the Following Situations Is Impossible