dentification of Long-Term Assets Terminology

Common terms associated with long-term assets follow.

Tangible assets

Natural resources

Intangible assets

Additions

Betterments

Extraordinary repair

Depreciation

Depletion

Amortization

Revenue expenditure

1. For each of the statements that follow, identify the term with which it is associated. (If two terms apply, choose the one that is most closely associated.)

1.	Periodic cost associated with intangible assets.	SelectTangible assetsNatural resourcesIntangible assetsAdditionsBettermentsExtraordinary repairDepreciationDepletionAmortizationRevenue expenditureItem 1
2.	Cost of constructing a new wing on a building.	SelectTangible assetsNatural resourcesIntangible assetsAdditionsBettermentsExtraordinary repairDepreciationDepletionAmortizationRevenue expenditureItem 2
3.	A group of assets encompassing property, plant, and equipment.	SelectTangible assetsNatural resourcesIntangible assetsAdditionsBettermentsExtraordinary repairDepreciationDepletionAmortizationRevenue expenditureItem 3
4.	Cost associated with enhancing a building but not expanding it.	SelectTangible assetsNatural resourcesIntangible assetsAdditionsBettermentsExtraordinary repairDepreciationDepletionAmortizationRevenue expenditureItem 4
5.	Periodic cost associated with tangible assets.	SelectTangible assetsNatural resourcesIntangible assetsAdditionsBettermentsExtraordinary repairDepreciationDepletionAmortizationRevenue expenditureItem 5
6.	A group of assets that gain their value from contracts or rights.	SelectTangible assetsNatural resourcesIntangible assetsAdditionsBettermentsExtraordinary repairDepreciationDepletionAmortizationRevenue expenditureItem 6
7.	Cost of normal repairs to a building.	SelectTangible assetsNatural resourcesIntangible assetsAdditionsBettermentsExtraordinary repairDepreciationDepletionAmortizationRevenue expenditureItem 7
8.	Assets whose value derives from what can be extracted from them.	SelectTangible assetsNatural resourcesIntangible assetsAdditionsBettermentsExtraordinary repairDepreciationDepletionAmortizationRevenue expenditureItem 8
9.	Periodic cost associated with natural resources.	SelectTangible assetsNatural resourcesIntangible assetsAdditionsBettermentsExtraordinary repairDepreciationDepletionAmortizationRevenue expenditureItem 9
10.	Cost of a repair that extends the useful life of a building.	SelectTangible assetsNatural resourcesIntangible assetsAdditionsBettermentsExtraordinary repairDepreciationDepletionAmortizationRevenue expenditureItem 10

2. Assuming the company uses cash for all its expenditures, which of the terms listed above would you expect to see on the income statement?

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Which ones would not result in an outlay of cash?

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