Chapter 9 Notes
Chapter 9 Notes ACCT 2101
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This 2 page Class Notes was uploaded by ljackson60 Notetaker on Sunday April 3, 2016. The Class Notes belongs to ACCT 2101 at Georgia State University taught by Kris J. Clark in Spring 2016. Since its upload, it has received 17 views. For similar materials see Principles of Accounting 1 in Accounting at Georgia State University.
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Date Created: 04/03/16
Prin of ACCT I 2106 Principles of Accounting with Dr. Clark Chapter 9 Notes Chapter 9 I. Introduction: Plant Assets A. Physical substance (definite size and shape) B. Are used in business operations C. Not intended for sale D. Expected to provide service to company for # of years, expect for land. II. Determining the cost of plant assets A. Historical cost principle 1. Requires that companies record plant assets at cost 2. Cost consists of all expenditures necessary to acquire a asset and make it ready for intended use. B. Accounting for Plant Assets 1. Depreciation is the process of allocating to expense the cost of a plant asset over its useful life in a rational and systematic manner. 2. Straightline depreciation is where the expense is the same amount for each year. Depreciable cost= costsalvage value III. Plant Asset Disposals A. Sale of plant assets; compare book value of asset with proceeds received. Book value=cost accumulated depreciation. B. Second point on subject 1. Give more detail on subject but organize it so it does not run on 2. Use this next section to make a new point about the subject or tie two ideas together a. This is where you take the time to elaborate on the above point although it may not be directly related to the overall subject it is useful information (1) New title for info you just brought up (a)Body of information here (b) Additional points here IV. Analyzing Plant Assets A. Return on assets indicated the amount of net income generated by each dollar of assets. Return on assets= Net income/Average Total Assets B. Asset Turnover indicated how efficiently a company uses its assets. Asset Turnover= Net Sales/ Average Total Assets V. Intangible Assets A. Rights, privileges, and competitive advantages that result from ownership of longlived assets that do not posses physical substance. B. LimitedLife Intangibles amortized to expense and credit asset account or accumulated amortization.