The amount initially paid to acquire an asset is called Firms recognize the reduction in service potential of assets such as building and equipment using the process of The amount that a company would have to pay today to acquire an asset it now holds is called The difference between income tax payable and income tax expense is reported on the balance sheet as either _______________ or a ______________

1. The amount initially paid to acquire an asset is called

acquisition cost

2. Firms recognize the reduction in service potential of assets such as building and equipment using the process of

depreciation

3. The amount that a company would have to pay today to acquire an asset it now holds is called

current replacement cost

4. The difference between income tax payable and income tax expense is reported on the balance sheet as either _______________ or a ______________.

deferred tax asset, deferred tax liability
deferred tax liability, deferred tax asset

5. Items, such as interest revenue on municipal bond holdings, that do not affect taxable income or income taxes paid any year are referred to as

permanent differences

6. Revenues and expenses that firms include in both net income to shareholders and in taxable income, but different periods are referred to as

temporary differences

7. Stockholders' equity can be expanded into the following three accounts: contributed capital, retained earnings and

accumulated other comprehensive income

8. If ORP corporation sells $25,000 of its product on account, it will see an increase in non-cash assets and

retained earnings

9. To recognize the cost of goods sold ORP Corporation will reduce retained earnings and reduce

non-cash assets

10. ORP Corporation sells land with book value of $12,000 for $9,000. This transaction results in ORP recording an increase in cash $9,000, a decrease in non-cash assets of $12,000 and a decrease in _______________ of $3,000.

retained earnings