Question

The depreciable cost of an asset is defined as:_______

a. the original cost less residual value.
b. value in use.
c. original cost less accumulated depreciation.
d. net book value.

Answer 1

The depreciable cost of an asset is the original cost less its residual value, representing the amount to be depreciated over the asset's life.

Step-by-step explanation:

The depreciable cost of an asset is defined as the original cost of an asset less its residual value. This concept is fundamental in accounting and finance, where the value of an asset is reduced over its useful life due to factors such as wear and tear, obsolescence, or legal or functional limitations, which is known as depreciation. In practice, when calculating the depreciable cost, you subtract the estimated salvage value of the asset at the end of its useful life from its original cost. The depreciable cost then becomes the basis for determining the annual depreciation expenses over the asset's expected useful life.