An Example of an Intangible Asset Classification on a Balance

question 41

Multiple Choice

An example of an intangible asset classification on a balance sheet is:

• A) rights held for a radio licence to the Himalayas.
• B) shares in BHP Limited.
• C) improvements to electric cables.
• D) interest on debentures due to be paid in 2010.

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Definitions:

Lemons Problem

A phenomenon where the presence of information asymmetry in a market leads to low-quality products being sold, as sellers have more information about the product than buyers.

Moral-Hazard

A situation where one party engages in risky behavior knowing that it is protected against the risk because another party will bear the cost.

Above-Equilibrium Wages

Wages that are higher than the market equilibrium, often used by employers to reduce turnover or increase productivity.

Firms

Businesses or enterprises engaged in commercial, industrial, or professional activities, aiming to earn profits by providing goods or services.