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26 terms

Accounting Ch 10 Plant Assets,Natural Resources, and Intangible Assets

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Accelerated-depreciation method
Depreciation method that produces higher depreciation expense in the early years rather than in the later years
Additions and improvements
Costs incurred to increase the operating efficiency, productive efficiency, or useful life of a plant asset
Amortization
The allocation of the cost of an intangible asset to expense over its useful life in a systematic and rational matter
Asset turnover ratio
A measure of how efficienly a company uses its assets to generate sales; calculated as net sales divided by average total assets
Capital expenditures
Expenditures that increase a company's investment in productive facilities.
Copyright
Exclusive grant from the federal government that allows the owner to reproduce and sell an artistic or published work
Declining-balance method
Depreciation method that applies a constant rate to the declining book value of the asset and produces a decreasing annual depreciation expense over the useful life of the asset
Depletion
The allocation of the cost of a natural resource to expense over its useful life in a rational and systematic manner
Depreciable cost
The cost of a plant asset minus salvage value
Franchise
A contractual arrangement under which the franchisor grants the franshisee the right to sell certain products, provide specific services, or use certain trademarks or trade names, usually within a designated geographic area.
Going-concern assumption
States that the company will continue in operation for the forseeable future
Goodwill
The value of all favorable attributes that relate to a business enterprise.
Intangible asset
Rights, priviliages, and competitive advantages that result from the ownership of long-lived assets that do not possess physical substance
Licenses
Operating rights to use public property, granted to a business enterprise by a governmental agency.
Materiality Priciple
If an item would not make a difference in decision making, a company does not have to follow GAAP in reporting it.
Natural Resources
Assets that consist of standing timber and underground deposits of oil,gas, or minerals
Ordinary repairs
Expenditures to maintain the operating efficiency and productive life of a unit.
Patent
An exclusive right issued by the U.S Patent Office that enables the recipient to manufacture, sell, or otherwise control an invention for a period of 20 years from the date of the grant.
Plant assets
Tangible resources that are used in the operations of the business and are not intended for sale to customers.
R and D Costs
Expenditures that may lead to patents, copyrights, new processes, or a new products.
Revenue expenditures
Expenditures that are immedietely charged against revenues as an expense.
Salvage value
An estimate of an asset's value at the end of its useful life
Straight-line method
Depreciation method in which periodic depreciation is the same for each year og the asset's useful life.
trademark
A word,phrase,jingle, or symbol that identifies a particular enterprise or product.
Units-of-activity method
Depreciation method in which useful life is expressed in terms of the total units of production or use expected from an asset
Useful life
An estimate of the expected productive life, also called service life, of an asset