If a Company Incurs Legal Costs in Unsuccessfully Defending Its

question 46

Multiple Choice

If a company incurs legal costs in unsuccessfully defending its patent, these costs would be debited to

• A) Legal Expense.
• B) Intangible Loss account.
• C) Patent account.
• D) Other Comprehensive Income.

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Definitions:

Net Capital Spending

This term refers to the total amount a company spends on acquiring or maintaining fixed assets, minus any sales of these assets, over a given period.

Earnings Per Share

A financial metric that measures the amount of a company's profit attributable to each outstanding share of common stock, calculated as net income divided by the number of outstanding shares.

Shares Of Stock

Equal units of ownership in a corporation, representing a claim on part of the corporation’s assets and earnings.

Net Capital Spending

The total expenditure on fixed assets minus any sales of fixed assets, reflecting a company's investment in its physical assets.