If Prepaid Costs Are Initially Recorded as an Asset No

question 99

True/False

If prepaid costs are initially recorded as an asset no adjusting entries will be required in the future.

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Definitions:

Amortization

The process of spreading the cost of intangible assets over their useful life, or gradually paying off debt through a series of fixed payments.

Research Costs

Expenses associated with activities undertaken to discover new knowledge, develop new products or processes, without assurance of commercial success.

Expensed

Costs that are charged against income in the period they are incurred, rather than being capitalized and amortized over time.

Finite Life

Finite life refers to the fixed period during which an asset is expected to be useful before it becomes obsolete or its value is fully depreciated.