WAEC Financial Accounting 1998 Question 25

Question 25

Depreciation

When a fixed asset is fully depreciated, its net book value is

  1. A.equal to its original cost.
  2. B.twice its original cost
  3. C.equal to its current market value
  4. D.the difference between its cost and market value
  5. E.equal to zero.
Show the answer and explanation

Answer: E (equal to zero.)

Explanation

Fully depreciated means all its cost has been written off, leaving a book value of nil.