5 Written questions
5 Matching questions
- Ordinary repairs
- Intangible asset
- Materiality Priciple
- a Rights, priviliages, and competitive advantages that result from the ownership of long-lived assets that do not possess physical substance
- b The allocation of the cost of a natural resource to expense over its useful life in a rational and systematic manner
- c Expenditures to maintain the operating efficiency and productive life of a unit.
- d If an item would not make a difference in decision making, a company does not have to follow GAAP in reporting it.
- e Operating rights to use public property, granted to a business enterprise by a governmental agency.
5 Multiple choice questions
- An estimate of the expected productive life, also called service life, of an asset
- Assets that consist of standing timber and underground deposits of oil,gas, or minerals
- States that the company will continue in operation for the forseeable future
- Expenditures that may lead to patents, copyrights, new processes, or a new products.
- A measure of how efficienly a company uses its assets to generate sales; calculated as net sales divided by average total assets
5 True/False questions
Revenue expenditures → Expenditures that are immedietely charged against revenues as an expense.
Amortization → The allocation of the cost of an intangible asset to expense over its useful life in a systematic and rational matter
Straight-line 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
Copyright → Exclusive grant from the federal government that allows the owner to reproduce and sell an artistic or published work
Salvage value → An estimate of an asset's value at the end of its useful life