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Ch2- The Balance Sheet-5 - • yields higher depreciation...

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________ ___________ Represent expenses paid in advance-- included in current assets if they expire within one year or one operating cycle Usually not a material item Present few or no reporting or valuation issues 2-2
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__________, _______, and _____________ (PP&E) Encompasses a company’s ______ assets Also called tangible, long-lived, and capital assets Fixed assets other than _________ are “______________” over the period of time they benefit the firm process of depreciation is method of allocating the cost of long-lived assets 2-3
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Property, Plant, and Equipment (PP&E) (cont.) On any balance sheet date, PP&E is shown at ________ ___________ _______ __________ = original cost - accumulated depreciation to date 2-4
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Property, Plant, and Equipment (PP&E) (cont.) __________ ______ spreads the expense evenly by periods
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Unformatted text preview: • ___________ yields higher depreciation expense in the early years of an asset’s useful life, and lower depreciation expense in the later years • _______ ____ ____________ bases depreciation expense for a given period on actual use 2-5 Depreciation methods: Property, Plant, and Equipment (PP&E) (cont.) Proportion of fixed assets (PP&E) in a company’s asset structure determined by __________ of the business Comparisons between firms can be difficult due to ____________ depreciation methods and estimates 2-6 Other Assets Can include multitude of other noncurrent items such as: • Property held for sale • Start-up costs in connection with a new business • Cash surrender value of life insurance policies • Long-term investments • Intangible assets 2-7...
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