Asked by Neisha Dressler on Jul 22, 2024
Verified
If depreciation expense is calculated without taking into account the asset's residual value,depreciation expense will be overstated.
Residual Value
The estimated amount that an asset is expected to realize upon the end of its useful life after all depreciation or amortization has been accounted for.
- Understand the principles of residual value, book value, and depreciation expense within the realm of asset management.
Verified Answer
HN
Huzaif NaeemJul 27, 2024
Final Answer :
True
Explanation :
If residual value is not considered, then the asset's useful life will be shorter than it actually is, leading to more depreciation expense each year and an overall overstatement of the asset's depreciation.
Learning Objectives
- Understand the principles of residual value, book value, and depreciation expense within the realm of asset management.
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