Flashcards in Acct 112 Chap 10 Deck (40):
Accelerated depreciation method
An accelerated depreciation method yields larger depreciation expenses in the early years of an asset's life and less depreciation in later years.
Process of allocating the cost of an intangible asset to expense over its estimated useful life.
Asset book value/Book value
Asset's acquisition costs less its accumulated depreciation (or depletion, or amortization); also sometimes used synonymously as the carrying value of an account.
Expenditures to make a plant asset more efficient or productive; also called improvements.
Additional costs of plant assets that provide material benefits extending beyond the current period; also called balance sheet expenditures
Change in an accounting estimate
Change in an accounting estimate that results from new information, subsequent developments, or improved judgment that impacts current and future periods.
Right giving the owner the exclusive privilege to publish and sell musical, literary, or artistic work during the creator's life plus 70 years.
All normal and reasonable expenditures necessary to get an asset in place and ready for its intended use.
Method that determines depreciation charge for the period by multiplying a depreciation rate (often twice the straight-line rate) by the asset's beginning-period book value.
Process of allocating the cost of natural resources to periods when they are consumed and sold.
Expense created by allocating the cost of plant and equipment to periods in which they are used; represents the expense of using the asset.
Major repairs that extend the useful life of a plant asset beyond prior expectations; treated as a capital expenditure
Privileges granted by a company or government to sell a product or service under specified conditions.
Amount by which a company's (or a segment's) value exceeds the value of its individual assets less its liabilities.
Diminishment of an asset value.
Condition in which the capacity of plant assets is too small to meet the company's production demands.
Asset life that is not limited by legal, regulatory, contractual, competitive, economic, or other factors
Long-term assets (resources) used to produce or sell products or services; usually lack physical form and have uncertain benefits.
Assets that increase the benefits of land, have a limited useful life, and are depreciated
Contract specifying the rental of property
Rights the lessor grants to the lessee under the terms of a lease.
Alterations or improvements to leased property such as partitions and storefronts.
Party to a lease who secures the right to possess and use the property from another party (the lessor).
Party to a lease who grants another party (the lessee) the right to possess and use its property.
(Franchises) Privileges granted by a company or government to sell a product or service under specified conditions.
(useful life) Length of time an asset will be productively used in the operations of a business; also called service life.
Modified Accelerated Cost Recovery System (MACRS)
Depreciation system required by federal income tax law.
Assets physically consumed when used; examples are timber, mineral deposits and oil and gas fields; also called wasting assets.
Conditions in which, because of new inventions and improvements, a plant asset can no longer be used to produce goods and services with a competitive advantages
Repairs to keep a plant asset in normal, good operating condition; treated as a revenue expenditure and immediately expensed.
Exclusive right granted to its owner to produce and sell and item or to use a process for 17 years.
Plant asset age
Plant asset age is an approximation of the age of plant assets, which is estimated by dividing accumulated depreciation by depreciation expense.
Tangible long-lived assets used to produce or sell products and services; also called property, plant and equipment (PP&E) or fixed assets.
Expenditures reported on the current income statement as an expense because they do not provide benefits in future periods.
Estimate of amount to be recovered at the end of an asset's useful life; also called residual value or scrap value
Method that allocates an equal portion of depreciable cost of plant assets (cost minus salvage) to each accounting period in its useful life.
Total asset turnover
Measure of a company's ability to use its assets to generate sales; computed by dividing net sales by average total assets.
Trademark or trade (brand) name
Symbol, name, phrase, or jingle identified with a company, product, or service.
Units-of production depreciation
Method that charges a varying amount to depreciation expense for each period of an asset's useful life depending on its usage.