Session:11 Long-Term Assets
Questions
Principles of Accounting, Volume 1: Financial Accounting | Leadership Development – Micro-Learning Session
Rice University 2020 | Michael Laverty, Colorado State University Global Chris Littel, North Carolina State University| https://openstax.org/details/books/principles-financial-accounting
1. 11.1 What is the difference between tangible and intangible assets?
2. 11.1 Define intangible assets.
3. 11.1 What is the difference between a patent and a copyright?
4. 11.1 What is goodwill, and how is it generated?
5. LO 11.2For each of the following transactions, state whether the cost would be capitalized (C) or recorded as an expense (E).
- Purchased a machine, $100,000; gave long-term note
- Paid $600 for ordinary repairs
- Purchased a patent for $45,300 cash
- Paid $200,000 cash for addition to old building
- Paid $20,000 for monthly salaries
- Paid $250 for routine maintenance
- Paid $16,000 for major repairs
6. 11.2 What amounts should be recorded as a cost of a long-term asset?
7. 11.2 Describe the relationship between expense recognition and long-term assets.
8. 11.3 Define natural resources.
9. 11.3 Explain the difference between depreciation, depletion, and amortization.
10. 11.4 Explain the differences between the process of amortizing intangible assets and the process of
depreciating tangible assets.
11. 11.4 What is goodwill, and what are the unique aspects of accounting for it?
12. 11.5 What are some examples of special issues in accounting for long-term assets? How are they
handled?
13. 11.5 What is the difference between functional obsolescence and physical obsolescence?