Exchange for Similar Assets definitions Flashcards
Exchange for Similar Assets definitions
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Fixed Asset Long-term tangible property used in business operations, such as vehicles or equipment, not intended for resale. Trade-In Value Amount offered by a dealer or buyer for an old asset when exchanged for a new one, often differing from book value. Net Book Value Asset's original cost minus accumulated depreciation, representing its current value on the balance sheet. Accumulated Depreciation Total depreciation expense recorded against an asset since its purchase, reducing its book value. Boot Additional cash paid or received in an asset exchange, often used to balance the transaction. Commercial Substance Characteristic of a transaction that results in changes to future cash flows, making the exchange economically significant. Journal Entry Formal accounting record documenting the details of a transaction, including debits and credits. Contra Asset Account that offsets a related asset account, such as accumulated depreciation reducing equipment value. Trade-In Allowance Discount or credit given for an old asset when acquiring a new one, reducing the cash outlay required. Gain Positive difference when the trade-in value of an asset exceeds its net book value during an exchange. Loss Negative difference when the trade-in value of an asset is less than its net book value during an exchange. List Price Stated selling price of a new asset before any trade-in discounts or allowances are applied. Notes Payable Liability account representing amounts owed, possibly used instead of cash in asset exchanges. Debit Accounting entry that increases assets or expenses and decreases liabilities or equity. Credit Accounting entry that increases liabilities or equity and decreases assets or expenses.
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