ACCT 1021- Midterm Exam Guide - Comprehensive Notes for the exam ( 50 pages long!)
Document Summary
Classifying long-lived assets: long-lived assets: tangible and intangible resources owned by a business and used in its operations over several years, tangible assets: have physical substance. Often not shown as a separate item on the balance sheet b. ii. Buildings, fixtures, and equipment: used in operations. b. iii. Land, buildings, fixtures and equipment are also called property, plant and equipment or fixed assets c. Intangible assets: long-lived assets without physical substance that confer specific rights on their owner. Patents, copyrights, franchises, licenses and trademarks: under the cost principle, all reasonable and necessary expenditures made in acquiring and preparing an asset for use (or sale) should be recorded as the cost of the asset. Expenditures are capitalized when they are recorded as part of the cost of an asset instead of as expenses in the current period d. i. Any sales tax, legal fees, transportation costs and installation costs are then added to the purchase price of the asset and special discounts are subtracted.
