According to Generally Accepted Accounting Principles,the Proper Accounting Treatment of the Cost

question 139

Multiple Choice

According to generally accepted accounting principles,the proper accounting treatment of the cost of developing intangible assets is to

• A)carry the cost as an asset indefinitely.
• B)amortize the cost over five years.
• C)amortize the cost over a reasonable life.
• D)write off the cost immediately.

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Definitions:

Unearned Rent Revenue

Income received from tenants for periods of occupancy that have not yet occurred, classified as a liability until earned.

Rent Revenue

Income earned from leasing out property or other assets to others.

Adjusting Entry

A journal entry made at the end of an accounting period to record any unrecognized income or expenses for that period.

Total Asset Turnover Ratio

A financial metric that measures the efficiency of a company's use of its assets in generating sales revenue or sales income to the company.