Question

The depreciable cost is

a. the cost of the asset minus the residual value.
b. cost of the asset plus the residual value.
c. cost of the asset minus depreciation expense.
d. historical cost less accumulated depreciation.

Answer 1

The depreciable cost is the cost of the asset minus the residual value. It is the amount that can be depreciated over the useful life of the asset.

Step-by-step explanation:

The depreciable cost is the cost of the asset minus the residual value. It represents the amount that can be depreciated over the useful life of the asset. Depreciation is the allocation of this cost over time to reflect the wear and tear or obsolescence of the asset.

For example, let's say a company purchases a computer for $1,000 and estimates that it will have a residual value of $200 after 5 years. The depreciable cost would be $1,000 - $200 = $800.

The options a and d are correct as they both represent the depreciable cost. Option b is incorrect because it adds the residual value to the cost of the asset, while option c subtracts the depreciation expense from the cost of the asset, which is not the correct calculation.