Accounting for IGCSE & O level - Accounting Procedures (Section 14 - No. 20)
What is the primary difference between the cost and the book value of an asset?
Book value includes salvage value; cost does not.
Cost includes accumulated depreciation; book value does not.
Cost is the initial purchase price; book value is reduced by accumulated depreciation.
Book value is always higher than the cost.
Explanation
Book value = Cost - Accumulated Depreciation. The cost is the initial purchase price of the asset.
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