If an asset has a cost of $50,000 and accumulated depreciation of $20,000, what is the net book value?

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Multiple Choice

If an asset has a cost of $50,000 and accumulated depreciation of $20,000, what is the net book value?

Explanation:
Net book value reflects the asset’s cost less accumulated depreciation. It is calculated by subtracting the total depreciation recorded from the original cost. Here, $50,000 minus $20,000 equals $30,000, so the net book value is $30,000. The other numbers don’t fit because $50,000 would ignore depreciation, $20,000 is the depreciation amount itself, and $70,000 would be adding, not subtracting, depreciation.

Net book value reflects the asset’s cost less accumulated depreciation. It is calculated by subtracting the total depreciation recorded from the original cost. Here, $50,000 minus $20,000 equals $30,000, so the net book value is $30,000. The other numbers don’t fit because $50,000 would ignore depreciation, $20,000 is the depreciation amount itself, and $70,000 would be adding, not subtracting, depreciation.

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