Learnsmart Ch. 7

Amortization

Allocation of cost of intangible asset.

Depletion

Allocation of cost of natural resources.

Depreciation

Allocation of cost of tangible fixed asset.

Trademark

An exclusive right to display a word, slogan, symbol, or emblem that distinctly IDs a company, product or service.

Capitalized

Purchase price plus the costs necessary to get asset ready for use.

Expensed

Research and developmental costs

Residual Value

The amount a company expects to receive for the asset at the end of its service life.

straight line and declining balance methods allocate the cost of a long term asset based on ______, while an activity based method allocated the cost of an asset based on its ____.

time, use

Patent

The exclusive right to manufacture a product or use a process granted for a period of 20 years.

Basket Purchase

When assets are purchased in a group for a single sum

Double declining balance method

book value at beginning of the year x 2 x 1 / service life

commonly used depreciation methods include

straight line, activity based and declining

book value of an asset

the original cost of the asset less accumulated depreciation.