Accounting Chapter 9 info
Rights, privileges, and competitive advantages that result from the ownership of long-lived assets that do not possess physical substance.
Intangible Assets
The revenue-producing ability of a depreciable asset will decline due to wear and tear and to obsolescence.
True
Three factors affect the computation of depreciation: cost, useful life, and salvage value.
True
The balance in accumulated depreciation represents the total cost that has been charged to expense since placing the asset in service.
True
Depreciation provides for the proper matching of expenses with revenues.
True
The allocation of the cost of an intangible asset to expense in a rational and systematic manner.
Amortization
The book value of a plant asset should approximate its fair value.
False
Depreciation applies to three classes of plant assets: land, buildings, and equipment.
False
Depreciation does not apply to a building because its usefulness and revenue-producing ability generally remain intact over time.
False
Depreciation expense and accumulated depreciation are reported on the income statement.
False
Depreciation is a process of asset valuation, not cost allocation.
False
Recognizing depreciation on an asset results in an accumulation of cash for replacement of the asset.
False
A right to sell certain products or services, or use certain trademarks or trade names within a designated geographic area.
Franchise
The excess of the cost of a company over the fair value of the net assets required.
Goodwill
Costs incurred by a company that often lead to patents or new products. These costs must be expensed as incurred.
Research and Development Cost