Principles Of Accounting - Chapter 10 Terms

Front 1

Accelerated depreciation method

Back 1

Depreciation method that records more depreciation near the start of an asset's useful life than the straight-line method does.

Front 2

Amortization

Back 2

The allocation of the cost of an intangible assets to expense over their useful life.

Front 3

Amortization expense

Back 3

Systematic reduction of the intangible asset's carrying value on the books.

Front 4

Basket purchase

Back 4

Purchase of two or more assets for one price.

Front 5

Capital expenditure

Back 5

Expenditure that increases the capacity or efficiency of an asset or extends its useful life.

Front 6

Capitalize

Back 6

To record as an asset.

Front 7

Copyright

Back 7

Exclusive right to reproduce and sell a book, musical composition, film, other work of art, intellectual property, or computer program. Issued by the federal government, a copyright extends 70 years beyond the author's life.

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Depletion

Back 8

The allocation of the cost of natural resources to expense over their useful life.

Front 9

Depletion expense

Back 9

Portion of a natural resource's cost used in a particular period. Computed in the same way as units-of-production depreciation.

Front 10

Depreciable cost

Back 10

The cost of a plant asset minus its residual value.

Front 11

Double-declining-balance (DDB) method

Back 11

An accelerated depreciation method that computes annual depreciation by multiplying the plant asset's decreasing book value by a constant percent that is two times the straight-line rate.

Front 12

Extraordinary repair

Back 12

Repair work that generates a capital expenditure.

Front 13

Franchises

Back 13

Privileges granted by a private business or a government ot sell a product or service under specified conditions; also called licenses.

Front 14

Goodwill

Back 14

Excess of the cost of an acquired company over the sum of the market values of its net assets.

Front 15

Intangible assets

Back 15

Long-lived resources without physical form that represent rights.

Front 16

Land improvements

Back 16

Plant assets representing improvements to land.

Front 17

Licenses

Back 17

Privileges granted by a private business or a government to sell a product or service under specified conditions; also called franchises.

Front 18

Natural resources

Back 18

Plant asset existing in or on land.

Front 19

Ordinary repair

Back 19

Repair work that maintains the plant asset in working order.

Front 20

Patent

Back 20

A federal government grant giving the holder the exclusive right to produce and sell an invention for 20 years.

Front 21

Relative-sales-value method

Back 21

Allocation technique that divides the total cost of a basket purchase of assets according to their relative sales value.

Front 22

Residual value

Back 22

Estimated cash value of a plant asset at the end of its useful life; also called salvage value.

Front 23

Salvage value

Back 23

Estimated cash value of a plant asset at the end of its useful life; also called residual value.

Front 24

Straight-line (SL) method

Back 24

Depreciation method that allocates an equal amount of depreciation to each year of a plant asset's useful life.

Front 25

Trademark

Back 25

Asset that represents distinctive identifications of a product of service; also called a trade name.

Front 26

Trade name

Back 26

Asset that represents distinctive identifications of a product or service; also called a trademark.

Front 27

Units-of-production (UOP) method

Back 27

Depreciation method that allocates a fixed amount of depreciation to each unit of output produced by a plant asset.