What Is the Merit Principle

question 51

Essay

What is the merit principle?

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Definitions:

Book Value

The worth of an asset as reported in the balance sheet, determined by subtracting any depreciation from the asset's initial cost.

Depreciable Cost

The total amount that an asset’s value can be depreciated over its useful life, excluding salvage value.

Salvage Value

The conjectured remain value of an asset at the end of its productive life.

Straight-Line Method

A technique for determining depreciation or amortization by equally distributing an asset's cost throughout its lifespan.