Question

The difference between the asset account and its related accumulated depreciation account (i.e., the value reflected by the accounting records) is known as _______.

Answer 1

The difference between the asset account and its related accumulated depreciation account is known as net book value.

Step-by-step explanation:

The difference between the asset account and its related accumulated depreciation account is known as net book value. This value reflects the net worth of an asset after accounting for accumulated depreciation. Accumulated depreciation is the total depreciation expense recorded for an asset over its useful life. By subtracting accumulated depreciation from the initial cost of the asset, we can determine its net book value, which represents its current value on the balance sheet.