Checking answers

*What is the difference between tangible and intangible assets?

*Immediately after a used truck is acquired, a new motor is installed at a total cost of

$3,850. Is this a capital expenditure or a revenue expenditure?

*What is the difference between a patent and a copyright?

*Distinguish between the accounting for capital expenditures and revenue expenditures.

For each of the following transactions, state whether the cost would be capitalized or

recorded as an expense.

Purchased a machine, $100,000; gave long-term note

Paid $600 for ordinary repairs

Purchased a patent for $45,300 cash

Paid $200,000 cash for addition to old building

Paid $20,000 for monthly salaries

Paid $250 for routine maintenance

Paid $16,000 for major repairs

*Explain the difference between depreciation, depletion, and amortization.