The Net Book Value of an Asset Is

question 156

Multiple Choice

The net book value of an asset is:

• A)original cost less the current year's depreciation expense.
• B)original cost less accumulated depreciation.
• C)current market value of the asset less associated selling expense.
• D)current market value of the asset.

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Definitions:

Cumulative

Pertaining to an aggregate or total amount added up over time, often used in context with dividends that are accumulated if not paid out.

Noncumulative

A term often used in dividends policy, indicating that if a dividend is not paid out, it doesn't accumulate for future payment.

U.S. GAAP

United States Generally Accepted Accounting Principles, which constitute the framework of guidelines for financial accounting used in the US.

Interest Expense

The charge for borrowing money typically calculated as a rate of the principal amount annually.