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ACCT110 Ch 10
Plant Assets, Natural Resources, and Intangibles
| Question | Answer |
|---|---|
| Accelerated depreciation method | Method that produces larger depreciation charges in the early years of an asset's life and smaller charges in later years. |
| Amortization | 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". |
| Betterments | Expenditures to make a plan asset more efficient or productive; also called improvements. |
| Capital expenditures | Additional costs of plant assets that provide material benefits extending beyond the current period; also called balance sheet expenditures. |
| Change in accounting estimate | Change in accounting estimate that results from new information, subsequent developments, or improved judgement that impacts current and future periods. |
| Copyright | Right giving the owner the exclusive privilege to publish and sell musical, literary, or artistic work during the creator's life plus 70 years. |
| Cost | All normal and reasonable expenditures necessary to get an asset in place and ready for its intended use. |
| Declining-balance method | 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. |
| Depletion | Process of allocating the cost of natural resources to periods when they are consumed and sold. |
| Depcreciation | Expense created by allocating the cost of plant and equipment to periods in which they are used; represents the expense of using the asset. |
| Extraordinary repairs | Major repairs that extend the useful life of a plan asset beyond prior expectations; treated as a capital expenditure. |
| Franchises | Privileges granted by a company or government to sell a product or service under specified conditions. |
| Goodwill | Amount by which a company's or a segment's value exceeds the value o fits individual assets less its liabilities. |
| Impairment | Diminishment of an asset value. |
| Inadequacy | Condition in which the capacity of plant assets is too small to meet the company's production demands. |
| Indefinite life | Asset life that is not limited by legal, regulatory, contractual, competitive, economic, or other factors. |
| Intangible assets | Long-term assets (resources) used to produce or sell products or services; usually lack physical form and have uncertain benefits. |
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