SAP Business One Certification Practice Exam

Is the asset net book value calculated as historical item cost minus accumulated depreciation?

1. True

2. False

3. Only for newly acquired assets

4. Only for non-depreciable assets

The correct answer is: True

The asset net book value is indeed calculated by taking the historical cost of the asset and subtracting any accumulated depreciation. This calculation reflects the value of the asset on the balance sheet, accounting for the wear and tear or usage over time. The historical cost represents the initial investment in the asset, and accumulated depreciation represents the total amount of depreciation expense that has been recorded against the asset since it was acquired. Thus, the formula effectively gives stakeholders a clearer picture of the asset's current value in the company's financial statements. In this context, it's important to note that the other options do not accurately represent the standard method for calculating net book value. For example, stating that the calculation only pertains to newly acquired assets or is limited to non-depreciable assets restricts the broader application of this accounting principle, which applies universally to assets that depreciate. Therefore, considering the general accounting standards in use and how net book value is defined, the assertion about the calculation being true is appropriate.