The difference between the balance of a fixed asset account (Property, Plant, and Equipment) and the balance of its related accumulated depreciation account is termed the book value of the asset.
A fixed asset is a long-term asset used in the production of goods and services. Normally, fixed assets include property, plant, and equipment (PP&E). Fixed (tangible) assets appear on the asset side of the balance sheet.
The Accumulated Depreciation account sums up depreciation expenses recorded in previous periods.
Thus, the difference between the fixed asset and its accumulated depreciation is the book value or net book value.
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