An Intangible Asset Should

question 116

Multiple Choice

An intangible asset should

• A) be expensed immediately if it has a finite life.
• B) not be amortized if it has an indefinite life.
• C) be grouped together with property plant, and equipment for reporting purposes.
• D) be depreciated over its useful life or legal life, whichever is longer.

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Definitions:

CVP Analysis

Cost-Volume-Profit Analysis, a method used in managerial accounting to understand the impact of varying levels of costs and volume on operating profit.

Variable Cost

Expenses that vary directly with the amount of products or services a company generates.

Fixed Costs

Costs that remain constant regardless of a company's level of activity, including expenses like rent, salaries, and insurance.

Profit

The financial gain made in a transaction or operation, calculated as the difference between revenue and expenses.