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A1C14
Accounting 1 Chapter 14
Term | Definition |
---|---|
accumulated depreciation | the total amount of depreciation expense that has been recorded since the purchase of a plant asset |
allowance method of recording losses from uncollectible accounts | crediting the estimated value of uncollectible accounts to a contra account |
board of directors | a group of persons elected by the stockholders to manage a corporation |
book value | the difference between an asset's account balance and its related contra account balance |
book value of a plant asset | the original cost of a plant asset minus accumulated depreciation |
book value of accounts receivable | the difference between the balance of Accounts Receivable and its contra account, Allowance for Uncollectible Accounts |
current assets | cash and other assets expected to be exchanged for cash or consumed within a year |
declaring a dividend | action by a board of directors to distribute corporate earnings to stockholders |
depreciation expense | the portion of a plant asset's cost that is transferred to an expense account in each fiscal period during a plant asset's useful life |
dividends | earnings distributed to stockholders |
estimated salvage value | the amount an owner expects to receive when a plant asset is removed from use |
merchandise inventory | the amount of goods on hand for sale to customers |
plant assets | assets that will be used for a number of years in the operation of a business |
retained earnings | an amount earned by a corporation and not yet distributed to stockholders |
straight-line method of depreciation | charging an equal amount of depreciation expense for a plant asset in each year of useful life |
uncollectible accounts | accounts receivable that cannot be collected |