Chap 10 Aquistions And Disposition Of PPE

Question 0

Avoidable interest

Answer 0

The amount of interest cost during the period that a company could theoretically avoid if it had not made expenditure for the asset.

Question 1

Additions

Answer 1

558

Question 2

Capital expenditure

Answer 2

A company weights the construction expenditures by the amount of time that it can incur interest cost on the expenditure.

Question 3

Capitalization period

Answer 3

542
The time during which a company must capitalize interest.

Presence of 3 conditions:

1. Expenditures for the asset have been made.
2. Activities that are necessary to get the asset ready for its intended use are in progress.
3. Interest cost are being incurred.

Question 4

Commercial substance

Answer 4

550

Question 5

Fixed assets

Answer 5

538

is a term used in accounting for assets and property that cannot easily be converted into cash.

Question 6

Historical coat

Answer 6

538

is the original nominal monetary value of an economic item.[

Question 7

Improvements (betterments)

Answer 7

558

Question 8

Involuntary conversion

Answer 8

561

Question 9

Lump-sum price

Answer 9

When company purchases a group of plant assets at a single time at one price altogether.

Question 10

Major repairs

Answer 10

559

Question 11

Nonmonetary assets

Answer 11

550

Assets in which the right to receive a fixed or determinable amount of currency is absent.

Question 12

Nonreciprocal transfers

Answer 12

555

Question 13

Ordinary repairs

Answer 13

559

Question 14

Plant asset

Answer 14

538

Often referred to as fixed assets. This would include long term assets such as buildings and equipment used by a company. Plant assets (other than land) will be depreciated over their useful lives.

Question 15

Property, plant, and equipment

Answer 15

538

Fixed assets, also known as "tangible assets" or property, plant, and equipment (PP&E), is a term used in accounting for assets and property that cannot easily be converted into cash. This can be compared with current assets such as cash or bank accounts, which are described as liquid assets. In most cases, only tangible assets are referred to as fixed.
IAS 16 (International Accounting Standard) defines Fixed Assets as assets whose future economic benefit is probable to flow into the entity, whose cost can be measured reliably.

Question 16

Prudent cost

Answer 16

556

Question 17

Rearranged and reinstallation costs

Answer 17

559

Question 18

Replacements

Answer 18

558

Question 19

Revenue expenditures

Answer 19

557

Question 20

Self-constructed asset

Answer 20

An asset constructed by its own company.

Question 21

Weighted-average accumulated expenditures

Answer 21

543