Basket (Lump-sum) Purchases definitions Flashcards
Basket (Lump-sum) Purchases definitions
You can tap to flip the card.
Control buttons has been changed to "navigation" mode.
1/15Skip to main content
Lump Sum Purchase Acquisition of multiple fixed assets together for a single price, requiring allocation of cost to each asset. Basket Purchase Transaction involving the purchase of several assets at once, often at a discount from their combined fair values. Fixed Asset Long-term tangible resource such as land or buildings, used in business operations and subject to cost allocation. Cost Allocation Process of distributing the total purchase price among individual assets based on their relative values. Land Non-depreciable asset acquired in a lump sum purchase, requiring separate cost assignment from buildings. Building Depreciable asset often acquired with land, necessitating accurate cost assignment for proper depreciation. Depreciation Systematic allocation of the cost of a tangible asset, such as a building, over its useful life. Relative Sales Value Method Three-step approach for assigning purchase price to assets based on their proportionate fair market values. Fair Market Value Estimated price at which an asset would change hands between willing parties in an open market. Percentage Allocation Calculation of each asset's share of the total fair market value to determine its portion of the purchase price. Journal Entry Accounting record that documents the debits and credits involved in a lump sum asset purchase. Discount Reduction from the combined fair market values of assets, often received when purchasing multiple assets together. Initial Cost Amount assigned to an asset on the books after applying the relative sales value method to a lump sum purchase. Cash Asset account credited in the journal entry to reflect payment made for a basket purchase. Note Payable Liability that may be used as payment in a lump sum purchase instead of cash, representing a promise to pay in the future.
08:09
