Match the Term and the Explanation

Multiple Choice

Match the term and the explanation.Not all explanations will be used. _____ Long-lived assets
_____ Average net fixed assets
_____ Capitalization of cost
_____ Units-of-production method
_____ Carrying value
_____ Asset impairment loss
_____ Amortization
_____ Net sales revenue
_____ Declining-balance method

A) The average proportion of a company's total assets that is long-lived.
B) An amortization method that produces higher amounts of amortization expense in the early years of an asset's life and lower amounts in the later years.
C) The cost of financing an asset.
D) Also known as book value.
E) Assets that will be used for more than three years.
F) The denominator of the fixed asset turnover ratio.
G) Also known as the average total cost of production.
H) How expenses are reported in the income statement.
I) An amortization method that spreads asset cost by production rather than time.
J) Also known as the initial value or balance forward value.
K) Assets that will be used for more than a year.
L) The process of transferring the cost of long-lived tangible assets to expenses.
M) When a company writes down the value of an asset when estimated future cash flows fall below the original level estimated.
N) The numerator of the fixed asset turnover ratio.
O) When costs are recorded as assets rather than expenses.
P) When a company writes down the value of an asset because estimated future cash flows fall below the book value.