Chapter 9 Long term Assets: Fixed and Intangible

Financial Accounting

Here is my understanding of the vocabulary. I need help correcting the definitions. Let me know if these terms are correct or not. Please provide the correct definitions. I am trying to write out these vocabulary based on my understanding without looking in the book. Thanks!

• Accelerated Depreciation method
  • Means depreciate large amount of costs in the first year, then the depreciation reductions year after year.
• Amortization
  • Series of payments or expenses
• Book Value
  • Initial Selling cost- depreciation
• Boot- I dont know. What does this definition mean?
• Capital Expenditures
  • Is something that helps increase the value
• Copyright
  • To protect the inventor from its product or service from being used without permission. Provides protection against illegal selling and distribition
• Depletion expense
  • To use up natural resources such as: oil, trees and water
• Depreciable cost
  • Cost or expense that lowers the value of an asset
• Depreciation
• Double Declining balance method
  • Increases that rate of depreciating an asset, then slowly declines over time
• Expected useful life
  • Total amount of time an asset depreciates
• Fixed Asset turnover ratio
  • Measures how quickly a current asset converted to cash
• Fixed assets
  • Dont know
• Goodwill
  • Dont know
• Initial cost
  • Beginning cost of an asset to acquire it
• Intangible assets
  • Copyrights, goodwill, patents
• Patents
  • Symbols
• Residual value
  • Remaining value after the asset is depreciated after useful life.
• Revenue expenditure
• Straight line method
• Trade in allowance
• Trademark
• Units of activity method