chap 9 quiz help

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1. Long-lived assets: a. assets that are used actively in the operations of the business, and that are expected to benefit the operations into the future 2. two major categories of long-lived assets: a. Tangible plant assets: long-term assets that have physical substance . i. Ex: land, equipment, buildings, furniture, fixtures b. Intangible assets: long-lived assets without physical substance i. Ex: trademarks, copyrights, patents, technology 3. Depreciation of Tangible assets: a. Not depreciated: land b. Depreciated: equipment, buildings, furniture, fixtures 4. Acquisition price of tangible assets: includes… a. Purchase price b. Expenditures needed to prepare asset for its intended use 5. Recording of acquisition price= CAPITALIZING 6. Bank purchase: total cost of a combined purchase a. Ex: land and building i. Building depreciates but land doesn’t 7. Component allocation: divide up equipment into different parts that will depreciate at different rates 8. RECORDING ACQUISITION OF TANGIBLE ASSETS: Equipment 25,750 Cash 750 Notes pay 25,000 9. Depreciation expense: a. Depreciation= cost allocation from acquisition cost (balance sheet) to expense
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