What happens to gravitational potential energy as a boulder falls off a cliff?

As the boulder falls off the cliff, the gravitational potential energy that the boulder has is converted into kinetic energy. If you do the calculations, you will see that the kinetic energy the boulder has is equal to the gravitational potential energy it had before it fell off a cliff. 

The objects do not reach terminal velocity         there is not enough time from the time the object falls from when it hits the ground to achieve terminal velocity. an object must be placed higher to achieve terminal velocity in order to be in free fall.