Amortization Is

question 60

Multiple Choice

Amortization is:

• A)The systematic allocation of the cost of an intangible asset to expense over its estimated useful life.
• B)The process of allocating to expense the cost of a plant asset to the accounting periods benefiting from its use.
• C)The process of allocating the cost of natural resources to periods when they are consumed.
• D)An accelerated form of expensing an asset's cost.
• E)Also called depletion.

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Definitions:

Total Asset Turnover

An efficiency indicator that assesses how well a business's assets are utilized to create sales revenue.

Debt-to-Equity Ratio

A financial measure reflecting the mix of equity and debt financing used to support a company's assets.

Acid-test Ratio

A stringent indicator of a company's short-term liquidity, measuring its ability to cover short-term liabilities with its most liquid assets, excluding inventory.

Working Capital

A financial metric representing the operational liquidity available to a business, calculated as current assets minus current liabilities.