An Intangible Asset

question 189

Multiple Choice

An intangible asset

• A) does not have physical substance yet often is very valuable.
• B) is worthless because it has no physical substance.
• C) is converted into a tangible asset during the operating cycle.
• D) cannot be classified on the balance sheet because it lacks physical substance.

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Definitions:

Bad Debt Expense

A cost reported on the income statement, reflecting credit sales that are not expected to be collected.

Retailer

A business entity that sells goods or merchandise directly to consumers.

Collection Process

Procedures followed by a business to collect money owed by customers.

Issuer

The entity responsible for providing a financial instrument or security, such as bonds, shares, or notes, to the market or the public.