ACCT 2301 midterm 2 review

Front

When does a company recognize Accumulated Depreciation (A|D) ?

Back

At the end of the fiscal year.

Front

Ending Accumulated Depreciation formula:

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Ending A|D = Beg. A|D + Depreciation Expense - Disposals

Front

Disposals are

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The process of removing an asset from a company's records.

Front

Depreciation Expense Formula:

Back

Depreciation Expense = Acquisition Cost (AC) - Salvage Value / # Years of Useful Life

Front

2 categories of Long-term assets:

Back

Tangible - PPE (physically exists)

Intangible - Patents, trademarks, etc. (doesn't physically exist)

Front

2 types of expense

Back

• - COGS

• - Decrease in assets

Front

Depreciation Def and formula

Back

The allocation/apportionment of the cost of an asset over the total years of its useful lifespan.

(AC/# years useful life)

Front

What does a company need to know to estimate depreciation?

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• - Original AC (Cost bought as)

• - Useful Life

• - Salvage Value

Front

Salvage Value Definition

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The amount expected to be received at the end of useful life.

Front

What expenses are included in the cost of equipment? (formula)

Back

Beginning price - Discount price + Delivery fee + Logo