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Flashcards in Chapter 9 Deck (32):
1

Depreciation method that expenses more of the asset's cost near the start of its useful life and less at the end of its useful life

Accelerated Depreciation Method

2

Process where a business spread the allocation of an intangible asset's cost over its useful life

Amortization

3

Measures how efficiently a business uses its average total assets to generate sales. Net Sales/Average Total Assets

Asset Turnover Ratio

4

Depreciable asset's cost minus accumulated depreciation

Book Value

5

Expenditure that increases the capacity or efficiency of a plant asset or extends useful life. Debited to an asset account

Capital Expenditure

6

Recording the acquisition of land, building, or other assets by debiting an asset account

Capitalize

7

Characteristic of a transition that causes a change in future cash flows

Commercial Substance

8

Exclusive right to reproduce and sell something of intellectual property

Copyright

9

Principle that states that acquired assets and services should be recorded at their actual cost

Cost Principle

10

Process where a business spreads the allocation of a natural resource's cost over its usage

Depletion

11

Cost of a plant asset minus its estimated residual value

Depreciable Cost

12

Process where a business spreads the allocation of a plant's asset's cost over its useful life

Depreciation

13

Accelerated depreciation method that compute annual depreciation by multiplying the depreciable asset's decreasing book value by a constant percent that is two times the straight-line depreciation rate

Double-Declining-Balance Method

14

Repair work that generates a capital expenditure because it extends the asset's life past the normal expected life

Extraordinary Repair

15

Privilege granted by a business to sell a product or service under specified conditions

Franchise

16

Excess of the cost of an acquired company over the sum of the market values of its net assets (assets-liabilities)

Goodwill

17

Permanent decline in asset value

Impairment

18

Asset with no physical form that is valuable because of the special rights it carries

Intangible Asset

19

A depreciable improvement to land

Land Improvment

20

Privilege granted by a government to use public property in performing services

License

21

Depreciation method that is used for tax purposes

Modified Accelerated Cost Recovery System (MACRS)

22

An asset that comes from the earth and is consumed

Natural Resource

23

When a newer asset can perform the job more efficiently that the old asset

Obsolete

24

Intangible asset that is a Federal Government grant giving an exclusive right over a specific product or formula for 20 years

Patent

25

Long-lived tangible asset that is used in the operation of a business

Plant Asset

26

Method of allocating the total cost of multiple assets purchased at one time. Total cost divided among assets based on relative market values

Relative-Market-Value Method

27

Expected values of a depreciable asset at the end of its useful life

Residual Value

28

Expenditure that does not increase the capacity or efficiency of an asset or extend its useful life

Revenue Expenditure

29

Depreciation method that allocates an equal amount of depreciation each year. (Cost-Residual Value)/Useful Life

Straight-Line Method

30

Asset that represents distinctive identifications of a product or service

Trademark

31

Depreciation method that allocates a varying amount of depreciation each year based on an asset's usage

Units-of-Production Method

32

Length of the service period expected from an asset

Useful Life