5 Written Questions

1. increase the productive life, operating efficiency, or capacity of the asset and are recorded as increases in asset accounts, not as expenses
2. estimated amount to be recovered by the company at the end of the asset's estimate useful life
3. maintain the productive capacity of the asset during the current accounting period only and are recorded as expenses
4. systematic and rational allocation of the cost of a natural resource over the period of its exploitation
5. net cash equivalent amount paid or to be paid for the asset

5 Matching Questions

1. cost in excess of net assets acquired
2. fixed assets
3. additions and improvements
4. carrying value
5. depreciation

1. a infrequent expenditures that increase an assets economic usefulness in the future
2. b excess of the purchase price of a business over the fair value of the business's assets and liabilities 2
3. c the process of allocating the cost of buildings and equipment over their productive lives using a systematic and rational method
4. d acquisition cost of an asset less accumulated depreciation 2
5. e have a physical substance 2

5 Multiple Choice Questions

1. a method that allocates the cost of an asset over its useful life based on the relation of its periodic output to its total estimate output
   1. straight-line depreciation
   2. declining-balance depreciation
   3. units-of-production depreciation
   4. depreciation
2. granted by the federal government for an invention, exclusive right is given to the owner to use it
   1. patent
   2. depletion
   3. copyright
   4. trademark
3. refers to interest expenditures included in the cost of a self-constructed asset
   1. capital expenditures
   2. natural resources
   3. capitalized interest
   4. long-lived assets
4. contractual right to sell certain products or services, use certain trademarks, or perform activities in a geographical region
   1. franchise
   2. trademark
   3. depletion
   4. goodwill
5. tangible and intangible resources owned by a business and used in its operations over several years
   1. fixed assets
   2. intangible assets
   3. long-lived assets
   4. tangible assets

5 True/False Questions

1. copyright → granted by the federal government for an invention, exclusive right is given to the owner to use it

   True        False

2. straight-line depreciation → this method allocates the cost of an asset over its useful life based on a multiple of the straight-line rate

   True        False

3. net book value → estimated amount to be recovered by the company at the end of the asset's estimate useful life

   True        False

4. tangible assets → have a physical substance

   True        False

5. declining-balance depreciation → this method allocates the cost of an asset over its useful life based on a multiple of the straight-line rate

   True        False