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