ACCT 284 ch 9

Which account is credited in the journal entry to record depreciation on machinery?

Accumulated depreciation

If the cost is capitalized, it is recorded as an, ____, not an expense

Asset

The entry to record annual straight-line depreciation will decrease a company's ____,____&_____

Asset book value, total assets, net income

Long-lived assets are____

Assets acquired for use over one or more years; used in the business to produce goods or services for customers; not intended for immediate resale

The journal entry to record amortization expense includes a ______ to Amortization Expense

Debit

Which of the following financial statements totals reduce by the adjusting entry to record amortization?

Net income on the income statement; total assets on the balance sheet; total stockholders equity on the balance sheet

What is the effect of recording depreciation expense on the accounting equation?

Total stockholders equity decreases; total assets decreased

A company may make an exception to the accounting rules and not capitalize a long-lived asset if it's cost is ______

Immaterial

Sunny skies Inc. bought a derelict hunting lodge, which it tore down at a cost of $45,000 and replaced it with a new lodge. Demolition cost should be _____

Capitalized

Depreciable cost equals asset's ______

Cost minus its residual (or salvage) value

When recording losses on the sale of fixed assets, the account, loss on disposal, is increased with a _____

Debit

Thermal Inc. bought a new office computer for $5000 cash. The journal entry to record this transaction will include a $5000 ____

Debit to equipment; credit to cash

Straight line, units of production, and declining balance are commonly used ____ methods

Depreciation

Straight-line depreciation

Does the best job of matching the expense with the related revenue when an asset is used evenly over its useful life

Another term for long live tangible assets is assets and is _____ found on that financial statement called the _____ ______

Fixed; balance sheet

A company might recorded in voluntary disposal of an asset____

If the asset was seriously damaged in a fire

An assets useful life _____

Is the assets expected economic life to its owner; can be expressed in either years or units

Declining balance depreciation

Is the best method to use when an asset is productive in the earliest years but quickly loses its usefulness

Units of production depreciation

Is the best method to use when the amount of an asset's use varies significantly from one accounting period to another

Fixed assets are ____And are found on the ____

Long live tangible assets; balance sheet

Assuming straight-line depreciation is used, a higher estimated useful life will result in a _____ depreciation expense per year and a _____ net income

Lower; higher

A company should depreciate a long live tangible asset to_____

Match part of the cost of the asset with the revenues generated by the asset

The formula for fixed asset turnover ratio equals net _____ divided by average net fixed assets

Revenue

Amortizing intangible assets affects the accounting equation by causing _____

Stockholders equity to decrease; assets to decrease

(Cost-residual value) x (1/useful life) is the formula for calculating the ____-____ method of depreciation

Straight-line