Which of the Following Is the Correct Accounting Treatment for a Patent

question 165

Multiple Choice

Which of the following is the correct accounting treatment for a patent?

• A) A patent must be shown as a current asset on the balance sheet.
• B) A patent must be depreciated or impaired, but not amortized.
• C) A patent must be capitalized and amortized over 20 years or less.
• D) A patent must be expensed, not capitalized, in the period in which it is purchased.

---

Definitions:

Micelle

An aggregate of surfactant molecules dispersed in a liquid colloid, forming a molecular assembly that can solubilize hydrophobic molecules in its hydrophobic core.

Hydrophobic

Characteristic of molecules or substances that do not readily mix with water.

Hydrophilic

Describes molecules or substances that are attracted to water and dissolve well in it.

Linoleic Acid

An essential polyunsaturated fatty acid belonging to the omega-6 fatty acid family, necessary for human health but cannot be synthesized by the human body.