The major difference between the service life of an asset and its physical life is that ... (a) service life refers to the time an asset will be used by a company and physical life refers to how long the asset will last. (b) physical life is the life of an asset without consideration of salvage value and service life requires the use of salvage value. (c) physical life is always longer than service life. (d) service life refers to the length of time an asset is of use to its original owner, while physical life refers to how long the asset will be used by all owners.

Question

Parker Clements

Business

1 July, 04:10

The major difference between the service life of an asset and its physical life is that ... (a) service life refers to the time an asset will be used by a company and physical life refers to how long the asset will last. (b) physical life is the life of an asset without consideration of salvage value and service life requires the use of salvage value. (c) physical life is always longer than service life. (d) service life refers to the length of time an asset is of use to its original owner, while physical life refers to how long the asset will be used by all owners.

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Christine Erickson · Answer 1

(a) service life refers to the time an asset will be used by a company and physical life refers to how long the asset will last.

Explanation:

Major difference between service life and physical life of an asset is about the tenure it will be used as the service life is the total duration the asset will be operative and useful, whereas the physical life is the entire duration along with the time it was not put to use of an asset.

The more useful component is the service life, as during the entire tenure of physical life the asset cannot be used, and viable period is service life.

Therefore, correct statement is

(a) service life refers to the time an asset will be used by a company and physical life refers to how long the asset will last.