Chapter 11, Problem 11.38E

Concept s; terminology

• LO11–1 through LO11–6, LO11–8

Listed below are several items and phrases associated with depreciation, depletion, and amortization. Pair each item from List A with the item from List B (by letter) that is most appropriately associated with it.

List A	List B
__________ 1. Depreciation	a. Cost allocation for natural resource
__________ 2. Service life	b. Accounted for prospectively
__________ 3. Depreciable base	c. When there has been a significant decline in value
__________ 4. Activity-based methods	d. The amount of use expected from plant and equipment and finite-life intangible assets
__________ 5. Time-based methods	e. Estimates service life in units of output
__________ 6. Double-declining balance	f. Cost less residual value
__________ 7. Group method	g. Cost allocation for plant and equipment
__________ 8. Composite method	h. Does not subtract residual value from cost
__________ 9. Depletion	i. Accounted for in the same way as a change in estimate
__________ 10. Amortization	j. Aggregates assets that are similar
__________ 11. Change in useful life	k. Aggregates assets that are physically unified
__________ 12. Change in depreciation method	l. Cost allocation for an intangible asset
__________ 13. Write-down of asset	m. Estimates service life in years