Residual Value Is

question 147

Multiple Choice

Residual value is

• A)The same as an asset's service life
• B)The cost of an asset minus its accumulated depreciation
• C)An estimate of the asset's value at the end of its useful life
• D)Another name for market value
• E)All of these

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Definitions:

Cost Recovery Method

A revenue recognition method where no profit is recognized until the costs of the sold goods or services are fully recovered.

Installment Sales

A method of sale that allows the buyer to make payments over a period of time, while the seller recognizes income as payments are received.

Collectibility

The likelihood or ability of a company to collect payments from customers for goods or services provided, considered when recognizing revenue.

Completed Transaction Method

An accounting method that recognizes revenue and expenses only when a transaction has been completed.