accounting 201 ch 7: long term assets
Which of the following are expenditures for assets subsequent to acquisition?
Additions Repairs and maintenance Improvements
For accounting purposes, depreciation is
an allocation of a cost of an asset.
When an asset has a significant decline in value and is written down, this is called
impairment
An asset that has no physical substance is referred to as a(n)
intangible asset.
The types of expenditures that can occur subsequent to an asset's acquisition are
repairs and maintenance. additions. improvements.
The depreciation method that allocates an equal amount of the depreciable base to each year of the asset's service life is the
straight-line method.
Which statement is true about the straight-line method of depreciation?
It allocates an equal amount of depreciation to each year the asset is used.
depreciation
allocation of the cost of a tangible fixed asset
amortization
allocation of the cost of an intangible asset
depletion
allocation of the cost of natural resources
The original cost of the asset less the accumulated depreciation is the ________ ________ of the asset
book; value
The allocation of the cost of a tangible fixed asset is referred to as _______, whereas the allocation of the cost of an intangible asset is referred to as _______.
depreciation; amortization
The purchase price and all costs to bring an asset to its desired condition and location for use should be ______.
capitalized
________ value is the amount the company expects to receive for the asset at the end of its service life.
residual
Long-term assets are classified as
tangible. intangible.
The depreciable cost is
the cost of the asset minus the residual value.
True or false: The initial cost of property, plant, and equipment includes the purchase price and all expenditures necessary to bring the asset to its desired condition and location for use.
true