"CLEP Financial Accounting," Vocabulary from Chapter 14

This list focuses on buying and selling plant assets.

Here are links to all the chapters of the test prep book published by Research & Education Association: Chapter 1, Chapter 2, Chapter 3, Chapter 4, Chapter 5, Chapter 6, Chapter 7, Chapter 8, Chapter 9, Chapter 10, Chapter 11, Chapter 12, Chapter 13, Chapter 14, Chapter 15, Chapter 16, Chapter 17, Chapter 18, Chapter 19, Chapter 20
25 words 15 learners

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Full list of words from this list:

words only definitions & notes
  1. capital
    assets available for use in the production of further assets
  2. assets
    anything of material value owned by a person or company
  3. capitalize
    consider expenditures as assets rather than expenses
  4. furnish
    provide with objects or articles that make a room usable
  5. equipment
    an instrumentality needed for an undertaking
  6. distinguish
    mark as different
  7. dispose
    give, sell, or transfer to another
  8. disposal
    the act or means of getting rid of something
  9. allocate
    distribute according to a plan or set apart for a purpose
  10. proportion
    ratio of the magnitude of a part to that of the whole
  11. profitable
    yielding material gain
  12. bankrupt
    financially ruined
  13. operational
    fit or ready for use or service
  14. transportation
    the commercial enterprise of moving goods and materials
  15. labor
    productive work, especially physical work done for wages
  16. install
    set up for use
  17. negate
    make ineffective by counterbalancing the effect of
  18. exchange
    the act of giving something in return for something received
  19. offset
    compensate for or counterbalance
  20. maintenance
    activity involved in keeping something in good working order
  21. improvement
    the act of making something better
  22. repair
    the act of putting something in working order again
    If the work on an asset merely returns it back to the condition it was, the cost should be expensed as a repair expense. Once an asset is operating, record any further maintenance as repair expense.
  23. principle
    a rule or standard especially of good behavior
    --The All-Costs-to-Get-Operating Principle requires a business to capitalize all costs necessary to get an asset operating.
    --The New Life Principle says that if any work on an asset extends the asset's life, the cost of that work should be capitalized (recorded as an asset).
  24. formula
    a statement expressing some fundamental principle
    --historical cost of an asset - asset's accumulated depreciation = fixed asset's book value
    --book value + gain (or - loss) = cash received
    --amount received - book value given up = gain (or loss)
  25. clue
    evidence that helps to solve a problem
    If the CLEP exam gives you the cash received on the sale of capital assets, doing the cash flow statement is easy. More likely, the exam will give you only the book value of the asset and the gain or loss.
Created on Wed Nov 02 11:39:47 EDT 2016 (updated Wed Dec 14 16:00:44 EST 2016)

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