CH10 - Fixed Assets and Intangible Assets Flashcards Preview

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Flashcards in CH10 - Fixed Assets and Intangible Assets Deck (22):
1

A depreciation method that provides for a higher depreciation amount in the first year of the asset's use, followed by a gradually declining amount of depreciation.

accelerated depreciation method

2

The periodic transfer of the cost of an intangible asset to expense.

amortization

3

The cost of a fixed asset minus accumulated depreciation on the asset.

book value

4

The amount a buyer owes a seller when a fixed asset is traded in on a similar asset.

boot

5

The costs of acquiring fixed assets, adding to a fixed asset, improving a fixed asset, or extending a fixed asset's useful life.

capital expenditures

6

A lease that includes one or more provisions that result in treating the leased assets as purchased assets in the accounts.

capital lease

7

An exclusive right to publish and sell a -literary, artistic, or musical composition.

copyright

8

The process of transferring the cost of natural resources to an expense account.

depletion

9

The systematic periodic transfer of the cost of a fixed asset to an expense account during its expected useful life.

depreciation

10

A method of depreciation that provides periodic depreciation expense based on the declining book value of a fixed asset over its estimated life.

double-declining-balance method

11

The number of dollars of sales that are generated from each dollar of average fixed assets during the year, computed by dividing the net sales by the average net fixed assets.

fixed asset turnover ratio

12

Long-term or relatively permanent tangible assets such as equipment, machinery, and buildings that are used in the normal business operations and that depreciate over time.

fixed assets

13

An intangible asset that is created from such favorable factors as location, product quality, reputation, and managerial skill.

goodwill

14

Long-term assets that are useful in the operations of a business, are not held for sale, and are without physical qualities.

intangible assets

15

A lease that does not meet the criteria for capital leases and thus is accounted for as an operating expense.

operating lease

16

Exclusive rights to produce and sell goods with one or more unique features.

patents

17

The estimated value of a fixed asset at the end of its useful life.

residual value

18

Costs that benefit only the current period or costs incurred for normal maintenance and repairs of fixed assets.

revenue expenditures

19

A method of depreciation that provides for equal periodic depreciation expense over the estimated life of a fixed asset.

straight-line method

20

The amount a seller allows a buyer for a fixed asset that is traded in for a similar asset.

trade-in allowance

21

A name, term, or symbol used to identify a business and its products.

trademark

22

A method of depreciation that provides for depreciation expense based on the expected productive capacity of a fixed asset.

units-of-output method