ACCTG 211 Chapter Notes - Chapter 6: Accelerated Depreciation, Financial Statement, Income Statement
Document Summary
Chapter 6 acquisition and use of long-term assets. Long-term assets are used in the operation of business. Long-term assets = computers, copy machines, furniture. The cost of a long-term asset must include all of the costs to get the asset ready for use. This includes new hardware, software, and employee training. Recording the purchase of a long-term asset affects the balance sheet and potentially the statement of cash flows. When the asset is used and the expense is recognized, the expense is called depreciation expense. Tangible assets: assets with physical substance; they can be seen and touched. Intangible assets: rights, privileges, or benefits that result from owning long-lived assets that do not have physical substance. When a firm purchases a physical plant, the acquisition cost includes the following: purchase cost of building or factories, costs to update or remodel the facilities, any other costs to get the plant operational.
