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Question 145 - CIS-HAM discussion

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The current value of an asset (original cost less the depreciated amount) is known as:

A.
Cost of ownership
Answers
A.
Cost of ownership
B.
Residual value
Answers
B.
Residual value
C.
Current balance
Answers
C.
Current balance
D.
Salvage value
Answers
D.
Salvage value
Suggested answer: B

Explanation:

The current value of an asset is the amount that the asset is worth at the present time, based on its original cost and the accumulated depreciation1.

The current value of an asset is also known as the residual value or the book value12.

The residual value is the estimated value of the asset at the end of its useful life2.

The residual value is used to calculate the depreciation expense of the asset over its useful life2.

The residual value is different from the salvage value, which is the estimated value of the asset if it is sold or disposed of2.

The cost of ownership is the total amount of money spent on acquiring, maintaining, and operating an asset over its lifetime3.

The current balance is the amount of money available in an account at a given time4.

asked 23/09/2024
Lee, Eduardo
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