Contrary to What Many Believe, When an Individual or a Company

question 4

True/False

Contrary to what many believe, when an individual or a company buys a software application, they have actually purchased the rights of ownership.

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Definitions:

Consideration

In legal and accounting terms, it refers to the value, either monetary or a promise of action, that is exchanged between parties in a contract.

Residual Value

the estimated value that an asset will have at the end of its useful life.

Straight-Line Method

A depreciation technique that allocates an equal portion of an asset’s initial cost to each year of its useful life.

Book Value

The net value of an asset calculated as total assets minus total liabilities, shown on the balance sheet.