Determine the Proper Classification(s)of the Asset Discussed in the Following $\quad$

question 90

Multiple Choice

Determine the proper classification(s) of the asset discussed in the following scenario: "Cher receives a copyright for a new song she has written"
I. Personal use property. $\quad$$\quad$$\quad$ IV. Intangible property.
II. Business use property. $\quad$$\quad$$\quad$ V. Real estate.
III. Tangible property. $\quad$$\quad$$\quad$$\quad$ VI. Personal property.

• A)Statements I and III are correct.
• B)Only statement IV is correct.
• C)Statements II and IV are correct.
• D)Statements II, IV, and VI are correct
• E)Statements II and VI are correct.

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Definitions:

Periodic Inventory System

An inventory system that updates inventory and cost of goods sold records at the end of an accounting period.

Gross Method

An accounting practice for recording inventory purchases without deducting any purchase discounts, which are recorded only if they are actually taken.

Terms 2/10, N/60

A trade credit term where a buyer can deduct 2% from the invoice amount if payment is made within 10 days; otherwise, the full invoice amount is due in 60 days.

Merchandise Inventory

An asset and perpetual inventory system account that records purchases of merchandise. Discounts and returns are recorded in this account for the buyer.