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Accelerated Deprreciation
Larger amounts of depreciation are recorded during the early years of an assets use and decreasing amounts in later years
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Accumulated Depreciation
Contra asset account that accumulates the depreciation of an asset
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Amortization
Process of allocating the cost of an intagible to an expense over its useful life
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Book Value
Cost of an asset minus the the accumulated depreciation. (carrying value)
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Buildings
Asset account, includes warehouses, offices and retail stores
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Capital Expenditures
COsts incurred for the purchase of property, equipment, cost of increasing the capacity or quality of assets.
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Copyright
Exclusive rights of protection granted to creators
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Depreciation
Process of allocationg cost of an asset to an expense over its useful life
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Depreciation Base
Total cost of an asset less its salvage or trade-in value
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Double-Decining Balance Method
An accelerated method of depreciation; book value at the beginning of the year multiplied by twice the stragiht-line rate
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Equipment
An asset account
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Extraordinary-repairs expenditures
Cost incurred for major overhauls or reconditioning of assets; repairs that either significantly prolong the life of an asset or increase its estimated salvage value
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Fixed Assets
Assets that are purchased for use in the business and have a useful life longer than one year
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Franchise
An exclusive right to use a company's name and to sell its products
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Gain on Disposal of Property and Equipment
Amount in excess of the book value
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Goodwill
Represents the value of the business over its identified assets
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Intagible Assets
Assets that are purchased for use in the business and have a useful life longer than one year but have no physical substance
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Land
An asset account that includes property that is used in the operations of a business
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Land Improvements
An asset account covering expenditures for improvements that are (1) not as permanent as the land or (2) not directly associated with a building. (driveways, parking lots, landscaping,fences, and outdoor lightning systems)
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Leasehold Improvements
An asset account used to record improvements to rented property that are maid or paid by the lessee (renter or tenant) but become the property of the lessor (owner or landlord) at the end of the lease term
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Loss on Disposal of Property and Equipment
Receives an amount less than the book value
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Modified Accelerated Cost Recovery System (MACRS)
An accelerated method of depreciation that is used to determine allowable depreciation for federal income tax return based on property acquired after 1986; assets are divided into eight classes
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Patent
Exclusive right to sell or produce an invention
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Revenue Expenditures
Costs incurred to maintain the operation of assets, such as normal repair expenses and fuel expenses
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Salvage Value
The expected value of the asset at disposable; sometimes called trade-in value or residual value
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Straight-line Method
A method of depreciations that assigns equal amounts of depreciation to each year of the assets depreciable life. (Cost minus salvage value divided by useful life [in years].)
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Trademark
Represents a word, slogas or symbol that identifies a company or product
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Units-of-production Method
A method of depreciation that allocates ab assets costs based on its usage or productivity within the period. (cost minus salvage value divided by estimated life in units salvage value divided by estimated life in units of pruction multiplied by the number of units produced)
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Useful Life
The lenght of time an asset is expected to be used
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Co-owneership
A situation in which each party owns a fractional share of all of the assets
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Dissolution
The ending of a partnership because of a change in personnel and the forming of a new partnership. The transition results primarily in changes to the Capital accounts, with routine business being carried on as usual
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Distributive Share
The sahre of a net income (net loss) allocated to each partner
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General Partnership (GP)
An association of two or more persons to carry on, as co-owners, a business for profit. The partners are general partners who actively and publicly participate in the transactions of the firm and have unlimited liabilty
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Limited Liability Partnership (LLP)
An organization similar to a limited partnership except that all partners may take an active role in the business of the partnership with only their invested capital at risk
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Limited Partnership
A partnership with at least one GP and one LP. The GP normally manages the partnership and the LP or partners have the largest share of invested of invested capital and usually cannot lose more than their capital contribution
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Liquidation
The ending of a partnership, involving the sale of the assets, payment of the liabilities, and distribution of the remaining cash to the partners
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Mutual Agency
The ability of each partner to act as an agent of the firm, thereby committing the entire firm to a binding contract
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Partnership
An association of two or more persons who carry on, as co-owners, a business for profit
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Partnership Agreement
A written contract that details the provisions of a partnership
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Realization
Conversion into cash, as happens in the case of the sale of assets
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