Management 30A Accounting

A depreciation method that produces higher depreciation expense in the early years than the straight-line approach.

Cost incurred to increase the operating efficiency, productive capacity, or expected useful life of a plant asset.

The process of allocating to expense the cost of an intangible asset.

Indicates how efficiently a company uses its assets to generate sales; calculated as net sales divided by average total assets.

Expenditures that increase the company's investment in plant assets.

A contractual agreement allowing one party (the lessee) to use another party's asset (the lessor); accounted for like a debt-financed purchase by the lessee.

An amount equal to the fair market value of the asset given up or the fair market value of the asset received, whichever is more clearly determinable.

An exclusive right granted by the federal government allowing the owner to reproduce and sell an artistic or published work.

A depreciation method that applies a constant rate to the declining book value of the asset and produces a decreasing annual depreciation expense over the asset's useful life.

The cost of a plant asset less its salvage value.

The process of allocating to expense the cost of a plant asset over its useful life in a rational and systematic manner.

A contractual arrangement under which the franchisor grants the franchisee the right to sell certain products, to provide specific services, or to use certain trademarks or trade names, usually within a designated geographic area.

The value of all favorable attributes that relate to a company that are not attributable to any other specific asset.

A permanent decline in the market value of an asset.

Rights, privileges, and competitive advantages that result from the ownership of long-lived assets that do not possess physical substance.

A party that has agreed contractually to let another party use its asset for a period at an agreed price.

A party that has agreed contractually to let another party use its asset for a period at an agreed price.

Operating rights to use public property, granted by a governmental agency to a business.

A contractual agreement allowing one party (the lessee) to use the asset of another party (the lessor); accounted for as a rental by the lessee.

Expenditures to maintain the operating efficiency and expected productive life of the asset.

An exclusive right issued by the US Patent Office that enable the recipient to manufacture, sell, or otherwise control and invention for a period of 20 years from the date of the grant

Tangible resources that have physical substance, are used in the operations of the business, and are not intended for sale to customers

Expenditures that may lead to patents, copyrights, new processes, and new products; must be expensed as incurred

A profitability measure that indicates the amount of net income generated by each dollar of assets; computed as net income divided by average assets.

Expenditures that are immediately charged against revenues as an expense.

A method in which companies expense an equal amount of depreciation for each year of the asset's useful life.

A word, phrase, jingle, or symbol that distinguishes or identifies, a particular enterprise or product.

A depreciation method in which useful life is expressed in terms of total units of production or use expected from the asset.

Amounts customers owe on account.

A schedule of customer balances classified by the length of time they have been unpaid.

A method of accounting for bad debts that involves estimating uncollectible accounts at the end of each period.

The average amount of time that a receivable is outstanding, calculated by diving 365 by the receivables turnover ratio.

An expense account to record losses from extending credit.

The net amount a a company expects to receive in cash from receivables.

The threat of nonpayment from a single large customer or class of customer that could adversely affect the financial health of the company.

A method of accounting for bad debts that involves expensing receivable accounts at the time receivables from a particular company are determined to be uncollectible.

A note that is not paid in full at maturity.

A finance company or bank that buys receivables from businesses for a fee and then collects the payments directly from the customers.

The party in promissory note who is making the promise to pay.

Claims for which formal instruments of credit are issued as evidence of the debt.