Chapter 9: Reporting and Analyzing Long-Lived Assets

What is represented in the accumlated depreciation account?

ammount charged to expense since the acquisition of the plant asset

Amortization

an accounting technique used to periodically lower the book value of a loan or an intangible asset over a set period of time.

Which of the following costs associated with the drug should Northwood amortize as an intangible asset?

In which of the following sections is a loss on disposal of a plant asset recorded?

in the Other expenses and losses section of the income statement

Companies must report ________ on the ________ to show that the asset is still in use.

Select answer from the options below

fully depreciated assets; balance sheet

The Other Expenses and Losses section of the income statement is where ________ are recorded.

Loss on disposal of the plant asset is reported in the "Other expense and losses" section of the income statement. It is not part of the normal operations of the company.

Amortization refers to the

cost allocation of an intangible asset.

Which of the following are major classes of plant assets?

land, land improvements, buildings, and equipment

Rainbow Toys wants continuous legal protection for the logo they have developed for their brand. What action should they take?

Register their trade name and trademark and then renew it every twenty years.

The ________ of an asset is equal to the asset's cost less accumulated depreciation.

Select answer from the options below - Correct!

Book value is the cost of a plant asset minus its accumulated depreciation. Depreciation is used to determine the amount of expense that is periodically allocated to a plant asset over its useful life. Therefore, depreciation is tied to the cost of an asset and not the amount a company thinks the asset is worth.

What would happen to assets and net income if a company capitalized their research and development costs?

Select answer from the options below

Both would be overstated.

Pine Level Paper has goodwill and trademarks as well as land, equipment and buildings. How should they report these assets?

The land, equipment and buildings would be listed under Property, Plant, and Equipment while goodwill and trademarks would be listed under Intangible Assets.