Current Accounting Standards Indicate That the Costs of Intangible Assets

question 92

Multiple Choice

Current accounting standards indicate that the costs of intangible assets with an indefinite life,such as goodwill,should

• A)not be amortized.
• B)be reported on the statement of retained earnings in the year in which acquired.
• C)be amortized over a reasonable period of time not to exceed 40 years.
• D)increase an expense account entirely in the year in which acquired.

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Definitions:

Profit Margin

A financial metric that measures the percentage of revenue that exceeds the costs of goods sold, indicating the profitability of a company.

Sales Decrease

A reduction in the amount of goods or services sold by a business within a specific time period.

Equity Financing

The method of raising capital through the sale of shares, offering investors ownership interests in the company.

Profit Margin

A financial metric that measures the percentage of profit a company retains after deducting its expenses from its total revenue.