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19 Cards in this Set
- Front
- Back
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Depreciation |
Systematic allocation of cost of a plant asset to expense over time period benefitted. |
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Estimated Useful Life |
Expected life of an asset during which it is anticipated to generate revenues; may be expressed in years or units of output |
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Estimated Residual Value (Salvage Value, Scrap Value) |
Expected cash value of an asset at the end of its useful life |
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Depreciable Cost |
Maximum amount company can take (Cost - Est. Residual Value) |
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Book Value (carrying value) |
Represents cost of Asset not yet expenses (Cost - Accumulated Depreciation) |
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Straight-line method (Years) |
(Cost - Est. Residual Life) / Est. Useful Life |
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Units-Of-Production Method (Output) |
(Cost - Est. Residual Value) / Est. Total Output |
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Revising Depreciation Useful life |
(Book Value at the time of change - Est. Residual Value) / Remaining Useful Life |
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Revenue Expenditures |
Ordinary Repairs On Income Statement Expensed as Incurred |
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Capital Expenditures |
Extraordinary Repairs and Betterments Debited to Asset Account |
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If Selling Price > Book Value |
Gain on Disposal |
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If Selling Price < Book Value |
Loss on Disposal |
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Patents |
An intangible asset that is a federal government grant conveying on exclusive 20 years right to produce and sell a process, product or technology |
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Copyrights |
Exclusive right to reproduce and sell a book, film, etc, issued by the federal government. Copyrights extend 70 years after Author's life |
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Trademarks/Brand Names |
Rights to use distinctive identification of a product or service |
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Franchises/Licenses |
Privileges granted by a private business as a government to sell a product or service under specific conditions. |
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Goodwill |
An intangible asset that results in the acquisition of another company at a premium value |
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Return on Assets Ratio |
(Net Income / Average Total Asset) = % |
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Fixed Asset Turnover |
(Sales / Average Fixed Asset) |
