Asset Management Quiz

What is the historical cost of an asset?

• The current market price

• The price at which the asset was originally purchased

• The estimated resale value

• The cost of maintaining the asset

What does fair value represent?

• The amount the asset would be sold for in an orderly transaction

• The price paid for the asset in the past

• The amount the asset cost to produce

• The amount of depreciation applied to the asset

Which of the following does an asset register record?

• Asset purchase details

• Maintenance costs only

• Only the current value of assets

• Depreciation and usage data

Why is the asset's serial number important in an asset register?

• It identifies the manufacturer

• It tracks the asset's warranty

• It provides a unique identifier for the asset

• It helps to estimate fair value

How does an asset register help a business?

• It tracks employee usage of office equipment

• It monitors and records assets to assess their financial impact

• It helps the business keep track of inventory only

• It is used to calculate payroll expenses

What is the purpose of recording depreciation in an asset register?

• To track an asset’s physical condition

• To reduce tax liability for the business

• To determine how much value the asset loses over time

• To find out the cost of future repairs

How is fair value different from historical cost?

• Fair value is based on current market conditions, while historical cost is based on the original purchase price.

• Fair value and historical cost are the same.

• Historical cost is adjusted for inflation, while fair value is not.

• Fair value is always lower than historical cost.

Fair value is always higher than historical cost

• Fair value is always higher than historical cost

• Fair value is the resale value, while historical cost is the original purchase price

• Fair value decreases over time, while historical cost remains the same

• Fair value only applies to vehicles and machinery

When would a business need to refer to its asset register?

• When preparing financial statements

• When hiring new employees

• When buying office supplies

• When planning staff meetings

Why is fair value important for businesses?

• It reflects the asset’s future earnings potential

• It shows how much profit an asset can make

• It gives an up-to-date estimate of the asset’s market value

• It helps decide when to sell the asset