chap9

Revenue Expenditures

Costs that are immediately charged against revenue as an expense.

Units-of-Activity Method

A depreciation method in which useful life is expressed in terms of the total units of production or the use expected from the asset

Straight-line method

A method in which an equal amount of depreciation is expensed each year of the asset's useful life.

Trademark

A word, phrase, jingle, or symbol that distinguishes or identifies a particular enterprise or product.

coal reserves.

All of the following are intangible assets except:

patent.

An exclusive right issued by the U.S. Patent Office that enables the recipient to manufacture, sell, or otherwise control an invention for a period of 20 years from the date of the grant is a:

copyright

An exclusive right to reproduce and sell artistic or published work is a

both in the current year and in the future years.

Depreciation is dependent on a number of estimates. When a change in an estimate is required, the change is made:

Ordinary repairs

Expenditures to maintain the operating efficiency and expected productive life of the asset.

Plant assets

Resources that have physical substance, are used in the operations of the business, and are not intended for sale to customers.

Intangible Assets

Rights, privileges, and competitive advantages that result from ownership of long-lived assets that do not possess physical substance.

$15,000

The Blooming Miracles Flower Shop bought a delivery van on January 1, 2017. The van cost $18,000 and had an expected salvage value of $3,000. The life of the van was estimated to be 5 years or 150,000 miles.

$3,000

The Blooming Miracles Flower Shop bought a delivery van on January 1, 2017. The van cost $18,000 and had an expected salvage value of $3,000. The life of the van was estimated to be 5 years or 150,000 miles. The depreciation expense for 2017 using the straight-line method of depreciation is:

$12,000

The Blooming Miracles Flower Shop bought a delivery van on January 1, 2017. The van cost $18,000 and had an expected salvage value of $3,000. The life of the van was estimated to be 5 years or 150,000 miles. Using the straight-line method of depreciation, the book value of the van at the beginning of the third year would be:

Depreciable Cost

The cost of a plant asset less its salvage value

depreciable cost.

The cost of an asset less its salvage value is referred to as:

both the declining-balance method and MACRS

The following method(s) is (are) accelerated method(s) of depreciation:

straight-line method

The most widely used method of depreciation is the:

Depreciation

The process of allocating to expense the cost of a plant asset over its useful life in a rational and systematic manner.

Goodwill

The value of all favorable attributes that relate to a business enterprise.