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Chapter 18 - Property, Plant, and Equipment
Chapter 18
Property, Plant, and Equipment
1. Land purchased for a future building site or as an investment would not be shown in the
Property, Plant, and Equipment section of the balance sheet.
2. The recorded cost of an asset should include both the net invoice price and all
transportation and installation costs.
3. The cost of land is not depreciated.
18-3
9. Accumulated Depreciation is classified as a contra asset account.
10. Depletion is the name given to the periodic allocation of the costs of assets created by
human effort.
11. The book value of an asset is usually the same as the fair market value of the asset.
Chapter 18 - Property, Plant, and Equipment
22. The difference between the acquisition cost of an asset and its accumulated depreciation is
called the ___________________.
23. The term used to describe the periodic transfer of the acquisition cost to expense when
minerals or other natural resources are physically removed during production is
24. The term used to describe the process of allocating the acquisition cost of an intangible
asset to expense during its estimated useful life is ___________________.
