Indicate Whether Each of the Following Statements Is True or False

question 45

Essay

Indicate whether each of the following statements is true or false.
_____ a) A trademark has an identifiable legal lifetime.
_____ b) U.S. GAAP requires that research and development costs be capitalized as assets and then expensed over a reasonable period of time.
_____ c) A patent is amortized over the longer of its legal life or useful life.
_____ d) The entry to record the amortization of a patent includes an increase to Amortization Expense, Patent and a decrease to Patent.
_____e) The capitalized cost of a trademark includes the cost to develop the trademark and to defend it.

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Definitions:

Statement of Changes

A financial statement delineating how and why specific equity accounts in a company's balance sheet changed over a period.

Net Assets

The total assets of a company minus its total liabilities, representing the owners' equity in the company.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, typically comprising the balance sheet, income statement, and statement of cash flows.

Profit-Oriented Business

A business that operates with the primary goal of earning revenue in excess of its operating costs.