| A | B |
|---|
| Current assets | Cash and other assets expected to be exchanged for cash or consumed within a year |
| Depreciation expense | The portion of a plant asset’s cost that is transferred to an expense account in each fiscal period during a plant asset’s useful life |
| Estimated salvage value | The amount an owner expects to receive when a plant asset is removed from use |
| Straight-line method of depreciation | Charging an equal amount of depreciation expense for a plant asset in each year of useful life |
| Plant asset record | An accounting form on which a business records information about each plant asset |
| Accumulated depreciation | The total amount of depreciation expense that has been recorded since the purchase of a plant asset |
| Book value of a plant asset | The original cost of a plant asset minus accumulated depreciation |
| Gain on plant assets | Revenue that results when a plant asset is sold for more than book value |
| Loss on plant assets | Loss that results when a plant asset is sold for less that book value |
| Declining-balance method of depreciation | Multiplying the book value of an asset by 2x the straight line rate |
| Real property | Land and anything attached to the land |
| Personal property | All property not classified as real property |
| Assessed value | The value of an asset determine by tax authorities for the purpose of calculating taxes |
| Accelerated depreciation | Assumes asset will produce more revenue at the beginning of its life |
| Depreciable cost | Purchase price less salvage value |
| Purchase Price of asset | Cost of asset plus transportation and installation costs |
| Why Assets are depreciated | Matching cost of asset to the revenue it produces |
