PRC-1 · Chapter 6 · Question 49 of 100
At the end of an asset's useful life, assuming the initial estimates were perfectly accurate, its Carrying Amount should logically equal its:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Residual Value
Explanation
Depreciation allocates the 'depreciable amount' (Cost - Residual Value). Once fully depreciated over its useful life, the remaining carrying amount on the books will exactly equal its estimated residual value.
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