The Cost of a Patent Should Be Amortized Over

question 112

Multiple Choice

The cost of a patent should be amortized over:

• A) the lesser of 20 years or its economic useful life
• B) the greater of 20 years or its economic useful life
• C) the lesser of 40 years or its economic useful life
• D) the greater of 40 years or its economic useful life

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Definitions:

Accounts Receivable

Funds that clients owe to a company for products or services delivered on credit.

Gross Profit

The financial metric resulting from subtracting the cost of goods sold from net sales revenue.

Operating Expenses

Operating expenses are costs associated with the day-to-day functions of a business, excluding direct production costs but including things like rent, utilities, and staff wages.

Sales Revenue

The total amount of money generated from selling goods or services before any expenses are deducted.