ACC 201: Chapter 8
The total cost of an asset less its accumulated depreciation is called:
Book value
The formula for computing annual straight-line depreciation is:
Cost less salvage value divided by the useful life in years
Depletion:
Is the process of allocating the cost of natural resources to periods in which they are consumed
Depreciation:
Is the process of allocating to expense the cost of a plant asset
Amortization:
Is the systematic allocation of the cost of an intangible asset to expense over its estimated useful life
The straight-line depreciation method and the double-declining-balance depreciation method:
Produce the same total depreciation over an asset's useful life
The useful life of a plant asset is:
The length of time it is productively used in a company's operations