ACC 201 ch 7

Allocates a higher depreciation in the earlier years of the asset's life and lower depreciation in later years.

A contra asset account representing the total depreciation taken to date

Allocates an asset's cost based on its use.

Occurs when a new major component is added to an existing asset.

Allocation of the cost of an intangible asset over its service life.

Net sales divided by average total assets, which measures the sales per dollar of assets invested.

Purchase of more than one asset at the same time for one purchase price.

Recording all losses in one year to make a bad year even worse.

Equal to the original cost of the asset minus the current balance in Accumulated Depreciation.

Record an expenditure as an asset.

Interest costs recorded as assets rather than interest expense.

An exclusive right of protection given to the creator of a published work such as a song, film, painting, photograph, book, or computer software.

An accelerated depreciation method that records more depreciation in earlier years and less depreciation in later years.

Allocation of the cost of a natural resource over its service life.

Allocation of the cost of a tangible asset over its service life.

Local outlets that pay for the exclusive right to use the franchisor company's name and to sell its products within a specified geographical area.

The value of a company as a whole, over and above the value of its identifiable net assets. Goodwill equals the purchase price less the fair value of the net assets acquired.

Occurs when the future cash flows (future benefits) generated for a long-term asset fall below its book value (cost minus accumulated depreciation).

The cost of replacing a major component of an asset.

Long-term assets that lack physical substance, and whose existence is often based on a legal contract.

Improvements to land such as paving, lighting, and landscaping that, unlike land itself, are subject to depreciation.

Large enough to influence a decision.

Assets like oil, natural gas, and timber that we can physically use up or deplete.

An exclusive right to manufacture a product or to use a process.

Net income divided by net sales; indicates the earnings per dollar of sales.

Expenses that maintain a given level of benefits in the period incurred.

The amount the company expects to receive from selling the asset at the end of its service life; also referred to as salvage value.

Net income divided by average total assets; measures the amount of net income generated for each dollar invested in assets.

How long the company expects to receive benefits from the asset before disposing of it; also referred to as useful life.

Allocates an equal amount of depreciation to each year of the asset's service life.

A word, slogan, or symbol that distinctively identifies a company, product, or service.