Asked by Ranjit Dhatt on Jun 04, 2024
Verified
A plant asset is fully depreciated when the book value is:
A) greater than the salvage value.
B) greater than the market value.
C) equal to the salvage value.
D) equal to the market value.
Salvage Value
The anticipated end-of-life value of an asset once it has finished its useful period.
Plant Asset
Long-term tangible assets that are used in the operations of a business and are not intended for sale.
Book Value
The value of an asset as recorded on a company's balance sheet, calculated as the cost of an asset minus accumulated depreciation.
- Understand the concept of full depreciation and its implications for asset book value.
Verified Answer
SM
Semsudin MuminovicJun 09, 2024
Final Answer :
C
Explanation :
A plant asset is considered fully depreciated when its book value equals its salvage value, meaning it has depreciated down to its estimated residual value at the end of its useful life.
Learning Objectives
- Understand the concept of full depreciation and its implications for asset book value.