ACCT101Chapter9Outline - NAME Krishna Desai Sussex County...

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NAME: Krishna Desai Sussex County Community College ACCT101 - Chapter 9 Outline Professor King Long-term assets Have a useful life of more than one year. Are used in the operation of a business. Are not intended for resale to customers. Long-Term assets include: Tangible Assets Natural Resources Intangible Assets Tangible assets: Long-term assets that have physical substance. Examples: Buildings, equipment, and land. Accounted for through depreciation—the periodic allocation of the cost of a tangible long-lived asset over its estimated useful life. Land is not depreciated because it has an unlimited life. Natural resources: Long-term assets purchased for the economic value that can be taken from the land and used up. Examples: Coal, oil, and lumber. Accounted for through depletion—the proportional allocation of the cost of a natural resource to the units extracted. Intangible assets: Long-term assets that have no physical substance, but have a value based on rights or advantages accruing to the owner. Examples: Copyrights and trademarks. Accounted for through depletion—the periodic allocation of the cost of the asset to the periods it benefits. Some intangible assets are not subject to amortization if their fair value is below their carrying value.
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Accounting for Long-Term Assets carrying value (or book value): The unexpired part of an asset’s cost.
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