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Systems Ch. 6 Fixed Assets
Terms in this set (20)
Name the long-term asset like PP&E that we use in a business (also known for capital expenditures)
Describe the objectives to the fixed asset system.
1.Process the acquisition of fixed assets as needed and in accordance with formal management approval and procedures.
2.Maintain adequate accounting records of asset acquisition, cost, description, and physical location in the organization.
3.Maintain accurate depreciation records for depreciable assets in accordance with acceptable methods.
4.Provide management with information to help plan for future fixed asset investments.
5.Properly record the retirement and disposal of fixed assets.
What are the three major fixed asset tasks?
Asset Acquisition, Asset Maintenance, & Asset Disposal
Which FA is obtaining a new asset or replacing an existing one.
Which FA involves a depreciation schedule, of which is a record used to initiate depreciation calculations.
Which FA is when an asset has reached the end of its useful life or when management decides to dispose of it, the asset must be removed from the fixed asset subsidiary ledger.
What is a request for proposal?
When we received an asset and it gets put into use, where do we create that fixed asset?
We're going to create that Fixed Asset in the subsidiary ledger and prepare the depreciation schedule
What is Cost Benefits Analysis?
Determines why this new asset could provide value to our organization.
What describes a depreciation schedule that tells us what we can book every month to the FA subsidiary ledger?
Monthly Depreciating Journal Entries
______________ allows us to review that depreciation that's booked every single month
Fixed Asset Depreciation Report
What does the FA status report show?
Shows the FA manager exactly the changes that have occurred in the FA subsidiary ledger
In Asset Disposal, you ______ a request to dispose from user and ________ ________ for disposal from the department manager
issue; obtain approval
Which physical control involves the FA accounting clerk using the disposal report?
True or False: Record-keeping and Custody should not be separated.
False. Record-keeping and Custody should be separated. We don't want someone with custody of asset make transaction disappear or write it off.
Which department is responsible for record keeping ?
Fixed Asset Department
Which department retains custody?
User/Department of the the Fixed Asset.
What helps to ensure assets are being used in accordance with company policy?
What can confirm the existence and conditions of FA?
What are the characteristics of independent verification in Fixed Assets?
1. Perform an audit of fixed assets
2. Done by internal audit
3. Confirms existence and condition
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