The Difference Between a Depreciable Asset's Cost and Its Residual

question 63

Multiple Choice

The difference between a depreciable asset's cost and its residual value is called

• A) the annual depreciation.
• B) accumulated depreciation.
• C) the depreciable amount.
• D) the revaluation amount.

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Definitions:

Guaranteed Payment

A fixed payment made to a partner by a partnership, independent of the partnership's profitability.

Cash Distribution

The payment of earnings, interest, or dividends in cash to shareholders or partners by a corporation, partnership, or other entity.

Liquidating Distribution

A payment made by a corporation to its shareholders during its dissolution, distributing its assets to the owners according to their ownership share.

Basis

The amount paid for an asset, used to determine gain or loss for tax purposes upon sale or other disposition.