Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Useful Information

Financial Accounting

1. Introduction to Accounting

Useful Information

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Multiple Choice

The useful life of a plant asset is best defined as:

The length of time the asset remains physically intact.

The period over which the asset is expected to be productively used in operations.

The time it takes for the asset to be fully depreciated for tax purposes.

The period until the asset's market value reaches zero.

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Verified step by step guidance

Understand the concept of 'useful life' in financial accounting: Useful life refers to the estimated period during which a plant asset is expected to be productively used in operations, not necessarily the time it remains physically intact or its market value reaches zero.

Recognize that useful life is a key factor in determining depreciation: Depreciation allocates the cost of the asset over its useful life, reflecting its usage in generating revenue.

Differentiate between physical life and useful life: Physical life refers to how long the asset remains intact, while useful life focuses on the period the asset contributes to operations.

Clarify the distinction between tax depreciation and useful life: Tax depreciation schedules may differ from the actual useful life used in accounting, as they are influenced by tax regulations.

Conclude that the correct definition of useful life is 'The period over which the asset is expected to be productively used in operations,' as this aligns with its role in financial accounting and depreciation calculations.