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Description
Flashcards by BRANDI MCCAMMON, updated about 2 months ago
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Created by BRANDI MCCAMMON
about 2 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 over the asset's estimated life |
| Depreciation expense | Process involving asset cost estimated useful life and residual 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 (GDS) | Most common (MACRS) system to calculate depreciation |
| Modified Accelerated Cost Recovery System (MACRS) | Part of Tax Reform Act of 1986 that revised depreciation schedules of ACRS. Tax Bill of 1989, 2010 updates MACRS |
| Residual value | Estimates 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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