Your Company Pays $620,000 for a Patent That Has 10

question 122

Multiple Choice

Your company pays $620,000 for a patent that has 10 years remaining.After two years,the company sells the patent for $500,000.The company should report:

• A)a debit to cash of $500,000 and a credit to patents of $500,000.
• B)a debit to patents of $620,000,a credit to cash of $500,000,and a credit to accumulated amortization of $120,000.
• C)a debit to cash of $500,000,a debit to accumulated amortization of $124,000,a credit to patents of $620,000,and a credit to gains of $4,000.
• D)a debit to patents of $496,000,a debit to losses of $4,000,and a credit to cash of $500,000.

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Definitions:

Need for Power

A personal drive and motivation to influence, control, or have authority over others.

Personal Power

The influence or authority an individual has over others stemming from personal traits, skills, or relationships, rather than from formal positions of authority.

Decision Making

The cognitive process of selecting a course of action from among multiple alternatives to achieve a desired goal.

Social Power

The ability of an individual or group to influence or control the actions, beliefs, or behavior of others in a social context.