Which one of the following regarding the book value of an asset is correct?

A) It is the fair value of the asset if the asset is sold.

B) It reflects the original cost of the asset less accumulated depreciation.

C) It is the original cost of the asset minus the depreciation expense for that asset during the year.

D) It is the original cost at which the asset was purchased.

Answer: B

The factors used to compute depreciation expense are an asset's:

A) Cost, residual value, and physical life.

B) Cost, residual value, and service life.

C) Fair value, residual value, and economic life.

D) Cost, replacement value, and service life.

Answer: B

Which of the following is considered a "contra" account?

A) Deferred Revenue.

B) Goodwill.

C) Accumulated Depreciation.

D) Cost of Goods Sold.

Answer: C