The term used to describe the amount the company expects to receive for an asset at the end of its service life isMultiple choice question.historical cost.residual value.impairment value.lower of cost or market value. What is bookkeeping In accounting, the term impairment refers toMultiple choice question.allocation of an asset over its service life.an asset’s significant decline in value.offsetting liabilities against the related assets.cost recovery of an asset for investment purposes. Goodwill may only be recognizedMultiple choice question.when assets are impaired.when intangible assets are undervalued.when a company pays less than fair value for an intangible.in a business acquisition. Only intangible assets that are purchased are recorded by a business.
- This exclusive right enables the owner to manufacture, sell, lease, or otherwise benefit from an invention for a limited period.
- Recording depreciation results in the allocation of the cost of a long-term asset to the years during which the asset provides _________ .
- The selling price of an asset.an allocation of a cost of an asset.a decline in value of an asset.
- When an asset is no longer useful, but cannot be sold, we have a ________.
Classifying Assets and Related Expenditures
This exclusive right enables the owner to manufacture, sell, lease, or otherwise benefit from an invention for a limited period. The value of a patent lies in its ability to produce revenue. Protection for the patent owner begins at the time of patent application and lasts for 17 years from the date the patent is granted.
Science Periodic Table Vocabulary
Such a lawsuit establishes the validity of the patent and thereby increases its service potential. In addition, the firm debits the cost of any competing patents purchased to ensure the revenue-generating capability of its own patent to the Patents account. In a basket or lump-sum purchase of assets, the total acquisition cost is allocated to the individual assets by multiplying the lump-sum purchase price timesthe relative book value percentages of each asset.the relative fair value percentages of each asset. Straight-line deprecation is calculated as the depreciable cost divided by __________.
NC Life Insurance – Other Life Topics – Chapter Quiz
- These restrictions generally are related to rates or prices charged; also they may be in regard to product quality or to the particular supplier from whom supplies and inventory items must be purchased.
- The formula for calculating declining balance depreciation is the depreciation rate per year times _____________.
- The formula for calculating declining balance depreciation is the depreciation rate per year times ___________.
- In Liam’s case, the $5,000 for this machine should be allocated over the years in which it helps to generate revenue for the business.
- Asset turnover ratio is net sales divided by ___________.average total assets.average accounts receivable.average noncurrent assets.average current assets.
- Overall, in determining a company’s financial performance, we would not expect that Liam should have an expense of $5,000 this year and $0 in expenses for this machine for future years in which it is being used.
This greater value means that the company generates an above-average income on each dollar invested in the business. Thus, proof of a company’s goodwill is its ability to generate superior earnings or income. Straight-line amortization is calculated the same was as straight-line depreciation for plant assets. Generally, we record amortization by debiting Amortization Expense and crediting the intangible asset account. An accumulated amortization account could be used to record amortization.
Determined by MACRS tables.the estimated use that the company expects to obtain from the asset before disposing of it.the time period from the purchase of the asset until it becomes impaired. The declining balance Bookstime method of depreciation is a multiple of the____. Straight-line rate of depreciation.earnings rate of the asset.units-of-output depreciation.MACRS depreciation tax rate.
Book value at beginning of year x 2/estimated service lifehistorical cost less residual value x 2/estimated service life.book value at beginning of the year less residual value x 2/ estimated service life.historical cost x 1/service life. Which of the following does not differ among the different depreciation methods? Multiple choice question.Depreciation recognized during the earlier years.Depreciation recognized during the last year of the asset’s service life.Total depreciation recognized over the asset’s service life.
- It allocates an equal amount of depreciation to each year the asset is used.d.
- The finite useful life for a copyright extends to the life of the creator plus 50 years.
- Current asset.intangible asset.finite asset.depreciable asset.
- Firms may include only outright purchase costs in the acquisition cost of an intangible asset; the acquisition cost does not include cost of internal development or self-creation of the asset.
- If an intangible asset is internally generated in its entirety, none of its costs are capitalized.
The term used to describe the amount the company expects to receive for an asset at the end of its service life is ____________. Historical cost.residual value.lower of cost or market value.impairment value. The depreciation method that allocates an equal amount of the depreciable base to each year of the asset’s service life is theMultiple choice question.MACRSdouble-declining-balance method.straight-line method.units-of-output method. An amount spent is considered a current expense, or an amount charged in the current period, if the amount incurred did not help to extend the life of or improve the asset. Therefore, this cost allocation of an intangible asset is referred to as maintenance would be expensed within the current period.