Salvage value is an estimate of an asset's value at the end of its benefit period.Group of answer choicesTrueFalse

The correct answer is True.

Salvage value, also known as residual value, is indeed an estimate of an asset's worth at the end of its useful life or benefit period. It represents the amount that a company expects to recover from an asset after it has been fully depreciated. This value is important for businesses as it affects various financial metrics, including depreciation calculations, asset management, and investment evaluations. When companies determine the depreciation expense for their assets, they consider the salvage value to accurately reflect the cost associated with using the asset during its life. Thus, recognizing that salvage value is an estimate of an asset’s value at the end of its benefit period is essential for accounting practices and financial planning.