Accounting Ch 6

Accounting Ch 6 - C hapter 6 Accounting for and P...

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Chapter 6: Accounting for and Presentation of Property, Plant, and Equipment, and Other Noncurrent Assets All expenditures must be accounted for as assets (capitalizing an expenditure) or expenses (expensing an expenditure). Expenditures should be capitalized if the item acquired will have an economic benefit to the entity that extends beyond the end of the current fiscal year. However, expenditures for maintenance and repairs, even though they are needed to maintain the usefulness of the asset over a number of years, are expensed as incurred. If land is sold for $X that it bought for $Y years ago, Assets are Cash +X, Land –Y, Revenues (Gain on sale of land X-Y) Depreciation is not an attempt to recognize a loss in market value or any difference between the original cost and replacement cost of an asset. Depreciation is written: Assets (-Accumulated depreciation); -Expenses (- Depreciation Expense) Net Book Value of an asset is the difference between the cost of the asset and
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This note was uploaded on 03/02/2011 for the course ACCT 502 taught by Professor Jaggi during the Fall '10 term at Rutgers.

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Accounting Ch 6 - C hapter 6 Accounting for and P...

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