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.

---

Definitions:

Managerial Accounting

The practice of identifying, measuring, analyzing, and interpreting accounting information to help managers make informed operational decisions.

Financial Accounting

A branch of accounting that focuses on the process of recording, summarizing, and reporting transactional information related to business operations to external parties.

Period Cost

Costs that are not directly tied to the production process and are expensed in the period in which they are incurred, such as administrative expenses.

Product Cost

The total expense incurred in creating a product, including materials, labor, and overhead costs.