Summary of Study Objectives - Summary of Study Objectives 1...

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Summary of Study Objectives 1 Describe how the cost principle applies to plant assets. all expenditures necessary to acquire the asset and make it rea is measured by the cash or cash equivalent price paid. 2 Explain the concept of depreciation. Depreciation is the pro the cost of a plant asset over its useful (service) life in a ration Depreciation is not a process of valuation, and it is not a proce accumulation of cash. Depreciation reflects an asset's decreasi producing ability, resulting from wear and tear and from obso 3 Compute periodic depreciation using the straight-line met expense pattern with those of other methods. is: The expense patterns of the three depreciation methods are as Method Annual Depreciat Straight-line Constant amount Declining- balance Decreasing amount Units-of- activity Varying amount 4 Describe the procedure for revising periodic depreciation. periodic depreciation in present and future periods, not retroac 5 Explain how to account for the disposal of plant assets.
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