Long-Term Operating Assets

Question 1

_______ long-term assets, such as PP+E or natural resources, have physical substance.

Answer 1

tangible

Question 2

_______ long-term assets, such as trademarks, patents and goodwill, do not have physical substance.

Answer 2

intangible

Question 3

Capitalized costs are reported as ______ on the ________ ___________.

Answer 3

assets on the balance sheet

Question 4

Capitalized costs are also called capital __________.

Answer 4

expenditures

Question 5

What are the two things that a capitalized cost MUST be?

Answer 5

1. an asset owned or controlled by the company
2. expected to provide future benefits

Question 6

Mineral deposits, timer tracts, oil and gas are all examples of ________ ___________, a tangible long-term asset.

Answer 6

Natural resources

Question 7

The asset retirement obligation for natural resources means that the company must factor in the cost to ______ _________.

Answer 7

restore property

Question 8

If there is an action done for improvement or betterment that is intended to extend the asset beyond the originally intended useful life, then the costs should be reported as an ______.

Answer 8

asset, because this means they are capitalized

Question 9

If there is an action done for routine repairs and maintenance, NOT enhancing the asset or extending the useful life, then it should be reported as an ________ in the period incurred.

Answer 9

expense