Accounting chap 8 vocab - Vocab Chapter 8 Accelerated...

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Vocab Chapter 8 Accelerated depreciation – a higher amount of depreciation is recorded in the early years and a lower amount in the later years; allowance for depreciation. Acquisition Cost – the amount that includes all of the cost normally necessary to acquire an asset and prepare it for its intended use; historical cost or original cost. Book value – the original cost of an asset minus the amount of accumulated depreciation. Capital expenditure – a cost that improves the asset and is added to the asset account; an item treated as an asset. Capitalization of interest – interest on constructed assets is added to the asset account. Change in estimate – a change in the life of the asset or in its residual value. Depreciation – the process of allocating the cost of a long-term tangible asset over its useful life. Double-declining-balance method – depreciation is recorded at twice the straight-line rate, but the balance is reduced each period.
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