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:

Alternative Response

A different or non-traditional reaction or solution to a given situation or problem.

Minds

The elements of a person that enables them to be aware of the world and their experiences, to think, and to feel; the faculty of consciousness and thought.

Physical Things

Objects that exist in space and time, possessing material substance and can be perceived by the senses.

Directly Observed

A method of collecting data or information through immediate, firsthand observation.