The Cost of an Internally Developed Unidentifiable Intangible Is Expensed

question 24

Multiple Choice

The cost of an internally developed unidentifiable intangible is expensed as incurred.Accordingly, which one of the following costs would be expensed in the year it was incurred?

• A)legal cost of obtaining a patent
• B)cost of improvements with a three-year life made to an asset that is being leased by the company for a five-year period
• C)deferred charges
• D)cost incurred to train management-level employees

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Definitions:

Volume Maximization

A strategy aimed at maximizing the quantity of products sold or produced, often regardless of profit margins.

Penetration Pricing

A marketing strategy where a product is priced lower than its competitors or the market average to attract customers and gain market share rapidly.

Price Sensitive

Being affected by changes in the price of goods or services, often referring to consumers whose buying decisions are heavily influenced by price changes.

Price Elasticity

An economic concept that measures how the quantity demanded of a good changes in response to a change in its price.