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22 Cards in this Set
- Front
- Back
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Acquisition Cost
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The amount that includes all of the cost normally necessary to acquire an asset and prepare it for its intended use.
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Capitalization of interest
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Interest on constructed assets is added to the asset account.
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Depreciation
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The allocation of the original cost of an asset to the periods benefited by it use.
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Land Improvements
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Costs that are related to land but that have a limited life.
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Straight-line method
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A method by which the same dollar amount of depreciation is recorded in each year of asset use.
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Book Value
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The original cost of an asset minus the amount of accumulated depreciation.
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Units of Production Method
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Depreciation is determined as a function of the number of units the asset produces.
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Accelerated Depreciation
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A higher amount of depreciation is recorded in the early years and a lower amount in the later years.
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Double declining-balance method
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Depreciation is recorded at twice the straight-line rate, but the balance is reduced each period.
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Change in Estimate
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A change in the life of the asset or in its residual value.
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Capital Expenditure
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A cost that improves the asset and is added to the asset account.
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Revenue Expenditure
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A cost that keeps an asset in its normal operating condition and is treated as an expense.
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Gain on sale of asset
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The excess of the selling price over the asset's book value.
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Loss on sale of asset
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The amount by which selling price is less than book value.
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Natural Resources
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Assets that are consumed during their use.
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Intangible assets
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Assets with no physical properties.
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Goodwill
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The excess of the purchase price to acquire a business over the value of individual net assets acquired.
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Research and development costs
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Costs incurred in the discovery of new knowledge.
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Cash dividends
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most common form of dividend declared on one date, paid out another date, paid to stockholders another date (3)
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1) date of declaration
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cash dividends are declared
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2) payment date
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paid out
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3) date of record
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dividends are paid to stockholders
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