| Term | Definition |
|---|
| plant asset | long-lived assets, such as land, buildings, and equipment, used in the operations of the busienss |
| intangible asset | an asset with no physical form, a special right to current and expected future benefits; i.e. patents, copyrigths, trademarks, goodwill |
| market value | the price the asset could be sold for |
| land improvements | costs of altering the land such as fencing, paving, security systems and lighting that are not included in the cost of land because they are subject to depreciation |
| amortization | depreciation on leasehold improvements |
| relative-sales-value method | the total cost of a basekt of good purchased for a single lump-sum amount - is divided among the assets according to their relative sales or market values |
| capital expenditure | expenditure that increases an asset's capacity or efficiency or extends its useful life; its cost is debited to an asset account and not expensed immediately |
| immediate expenses | costs that do not extend the asset's capacity or its useful life, but merely maintain the asset or resstore it to working order are recorded as... |
| estimated useful life | length of a service that a business expects to get from an asset; may be expressed in years, units of output, miles, or other measures |
| estimated residual value | a.k.a. scrap value or salvage value - the exepcted cash value of an asset at the end of its useful life |
| depreciable cost | the cost of a plant asset minus its estimated residual value |
| straight-line method | depreciation method in which an equal amount of depreciation expense is assigned to each year of asset use |
| book value | cost less accumulated depreciation |
| units-of-production method | depreciation method by which a fixed amount of depreciation is assigned to each unit of output produced by the plant asset =(costt-residual value)/(useful life, in ....) |
| double-declining-balance method | the main accelerated depreciation method that computes annual depreciation by multiplying the asset's decreasing book value by a constasnt percentage, which is 2 times the straight-line rate |
| accelerated depreciation method | a depreciation method that writes off a relatively larger amoutn of the asset's cost nearer the start of its useful life than the straight-line method does |
Combine with other sets
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