Question

Book value refers to the value of

• A. a fixed asset, such as a building or machine, as recorded in ledger
• B. a movable property as recorded in official ledger
• C. cash kept in a locker as recorded in the ledger
• D. property as intimated to income tax department

Hint:

Book value = original cost of fixed asset minus depreciation, shown in financial statements.

Answer 1

The Correct Option is A

Step 1: Definition of Book Value: Book value refers to the value of a fixed asset as recorded on the company's accounting books or ledger, reflecting the original cost minus accumulated depreciation.
Step 2: Asset Type: Fixed assets include buildings, machinery, vehicles, and equipment that are long-term in nature and used in business operations.
Step 3: Purpose: Book value helps in financial accounting to assess the asset’s worth and depreciation over time, important for balance sheets.
Step 4: Exclusions: Movable properties, cash, or income tax intimated property do not fit the accounting definition of book value.
Therefore, book value is the value of a fixed asset as recorded in the ledger.