Chapter 9 Vocabulary Flashcards
accelerated depreciation method
A depreciation method that provides for a higher depreciation amount in the first year of the asset’s use; followed by a gradually declining amount of depreciation.
account form
The periodic transfer of the cost of an intangible asset to expense.
book value
The cost of a fixed asset minus accumulated depreciation on the asset.
boot
The amount a buyer owes a seller when a fixed asset is traded in on a similar asset.
capital expenditures
The costs of acquiring fixed assets; adding to a fixed asset; improving a fixed asset; or extending a fixed asset’s useful life.
copyright
An exclusive right to publish and sell a literary; artistic; or musical composition.
depletion
The process of transferring the cost of natural resources to an expense account.
depreciation
The systematic periodic transfer of the cost of a fixed asset to an expense account during its expected useful life.
double-declining-balance method
A method of depreciation that provides periodic depreciation expense based on the declining book value of a fixed asset over its estimated life.
fixed asset turnover ratio
The number of dollars of sales that are generated from each dollar of average fixed assets during the year; computed by dividing the net sales by the average net fixed assets.
goodwill
An intangible asset that is created from such favorable factors as location; product quality; reputation; and managerial skill.
intangible assets
Long-term assets that are useful in the operations of a business; are not held for sale; and are without physical qualities.
patents
Exclusive rights to produce and sell goods with one or more unique features.
residual value
The estimated value of a fixed asset at the end of its useful life.
revenue expenditures
Costs that benefit only the current period or costs incurred for normal maintenance and repairs of fixed assets.
