Which one of the following statements is correct concerning a firm\'s fixed asse

Question

Which one of the following statements is correct concerning a firm's fixed assets? Answer            

                            
           The market value is the expected selling price in today's economy.                             
           The market value is affected by the accounting method selected.                             
           The market value is equal to the initial cost minus the depreciation to date.                             
           The book value is equal to the market value minus the accumulated depreciation.                             
           The book value is the greater of the initial cost or the current market value.

Explanation / Answer

The book value is equal to the market value minus the accumulated depreciation.

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