Current Accounting Standards Indicate That the Costs of Intangible Assets

question 105

Multiple Choice

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

• A)not be amortized, but should be reviewed annually for impairment.
• 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)be debited to an expense account entirely in the year in which acquired.

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Definitions:

Legislation

A set of laws and regulations enacted by governmental bodies.

Marginal Products

The addition to total output due to the employment of one more unit of a specific factor of production, keeping all other factors constant.

Wage Rates

The fixed amount of compensation or payment given to employees for their services, typically expressed per hour or per unit of work.

Income Effect

The change in an individual's or economy's purchasing power due to a change in real income.