39852176
Description
Flashcards by Laura Samuelson, updated 3 months ago
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Created by Laura Samuelson
3 months ago
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| Question | Answer |
| Accelerated Cost Recovery System (ACRS) | Tax law enacted in 1981 for assets put in service from 1981 through 1986 |
| Accelerated Depreciation | Computes more depreciation expense in the early years of the asset's life than in the later years |
| Accumulated Depreciation | Amount of depreciation that has accumulated on plant and equipment assets |
| Asset Cost | Amount company paid for the asset |
| Book Value | Cost less accumulated depreciation |
| Declining-Balance Method | Accelerated method of depreciation. The depreciation each year is calculated by book value beginning each year times the rate |
| Depreciation | Process of allocating the cost of an asset (less residual value) over the asset's estimated life |
| Depreciation Expense | Process involving asset cost, estimated useful life, and residual value (salvage or trade-in value) |
| Depreciation Schedule | Table showing amount of depreciation expense, accumulated depreciation, and book value for each period of time for a plant asset |
| Estimated Useful Life | How long asset will be in use |
| General Depreciation System (GGDS) | Most common (MACRS) system to calculate depreciation |
| Modified Accelerated Cost Recovery System (MARCS) | Part of Tax Reform Act of 1986 that revised depreciation schedules of ACRS. Tax Bill of 1989, 2010 updates MACRS |
| Residual Value | Estimated value of a plant asset after depreciation is taken (or end of useful life) |
| Salvage Value | Cost less accumulated depreciation |
| Straight-Line Method | Method of depreciation that spreads an equal amount of depreciation each year over the life of the assets |
| Straight-Line Rate | One divided by number of years of expected life |
| Trade-In Value | Estimated value of a plant asset after depreciation is taken (or end of useful life) |
| Units-of-Production Method | Depreciation method that estimates amount of depreciation based on usage |
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