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.

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Definitions:

Balance Of Trade

The difference between a country's exports and imports of goods.

Net Flow

The difference between the inflow and outflow of funds over a specific period, often used in financial and business analysis.

Money

A medium of exchange that is widely accepted in transactions for goods and services.

Influence Exchange Rates

Refers to the impact of various economic, political, and market factors on the value of one currency in relation to another.