Your Company Pays $620,000 for a Patent That Has 10

question 73

Multiple Choice

Your company pays $620,000 for a patent that has 10 years remaining.Each year,your company should:

• A)debit amortization expense for $62,000 and credit accumulated depreciation for $62,000.
• B)debit intangible assets and credit accumulated amortization for an amount equal to 20% of book value.
• C)debit amortization expense for $62,000 and credit patent for $62,000.
• D)report no amortization expense because patents are not subject to amortization.

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Definitions:

Insure Goods

To insure goods means to secure a financial protection or coverage against possible damage, loss, or theft through an insurance policy.

Good Title

A legal term indicating that a property owner has legal ownership and the right to sell the property free from any liens or claims.

Misrepresented

Refers to providing false, misleading, or incorrect information, intentionally or unintentionally, about a product, service, or situation.

Insurable Interest

Any interest in property such that the owner would experience a benefit from the continued existence of the property or a loss from its destruction.