Choose the appropriate definition for each term. Term Long-lived assets Capitalization of cost Units-of-production method Definition Assets that will be used for more than a year. How expenses are reported in the income statement. A depreciation method that produces higher amounts of depreciation expense in the early years of an asset's life and lower amounts in the later years. Carrying value Asset impairment loss Depreciation

Choose the appropriate definition for each term. Term Long-lived assets Capitalization of cost Units-of-production method Definition Assets that will be used for more than a year. How expenses are reported in the income statement. A depreciation method that produces higher amounts of depreciation expense in the early years of an asset's life and lower amounts in the later years. Carrying value Asset impairment loss Depreciation

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Description: Choose the appropriate definition for each term.TermLong-lived assetsCapitalization of costUnits-of-production methodDefinitionAssets that will be used for more than a year.How expenses are reported in the income statement.A depreciation method that

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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Question

Choose the appropriate definition for each term.
Term
Long-lived assets
Capitalization of cost
Units-of-production method
Definition
Assets that will be used for more than a year.
How expenses are reported in the income statement.
A depreciation method that produces higher amounts of depreciation expense in the early years of an asset's life
and lower amounts in the later years.
Carrying value
Asset impairment loss
Depreciation

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Step 1: Definition of long- lived assets

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Step 2: Definition of capitalization of costs

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Step 3: Definition of Units of production method

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Step 4: Definition of carrying value

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Step 5: Definition of Assets impairment loss

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Step 6: Definition of depreciation

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