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:

Organizational Objectives

Goals or targets that a company or an organization aims to achieve.

Activity Metrics

Quantitative measures used to assess the performance or success of specific actions or engagements in various contexts, such as website analytics.

Financial Outcomes

The results or consequences of financial activities, including profits, losses, return on investment, and changes in financial position.

Brand Success

The achievement of a brand in fulfilling its goals, such as gaining recognition, customer loyalty, and financial growth.