A Patent Should Be Amortized Over

question 36

Multiple Choice

A patent should be amortized over

• A) twenty years.
• B) its useful life.
• C) its useful life or twenty years, whichever is longer.
• D) its useful life or twenty years, whichever is shorter.

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Definitions:

Sales Discounts

Reductions in the price of goods or services offered as an incentive to customers to encourage prompt payment.

Net Sales

The amount of sales revenue remaining after deducting sales returns, allowances, and discounts.

Sales Returns

Transactions where customers return previously purchased merchandise, possibly due to defects or dissatisfaction, impacting the seller's revenue.

Freight-in

The cost of shipping goods to the buyer's location, which is often included in the inventory cost.