Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

4. Merchandising Operations

Net Sales

Financial Accounting

4. Merchandising Operations

Net Sales

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Multiple Choice

The original cost of the asset less the accumulated depreciation is the ______ of the asset.

gross profit

book value

market value

net sales

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Verified step by step guidance

Understand the concept of 'book value': In financial accounting, the book value of an asset is calculated as the original cost of the asset minus the accumulated depreciation. It represents the value of the asset as recorded in the company's books.

Identify the components: The original cost refers to the purchase price or acquisition cost of the asset, while accumulated depreciation is the total depreciation expense recorded over time for the asset.

Apply the formula: The formula for book value is:

Book Value = Original Cost - Accumulated Depreciation

Compare the options provided: Gross profit, market value, and net sales are unrelated to the calculation of book value. Gross profit refers to revenue minus cost of goods sold, market value is the current selling price of the asset, and net sales is total revenue minus returns and allowances.

Conclude that the correct term for the original cost less accumulated depreciation is 'book value,' as it aligns with the definition and formula provided.