Asked by Mercedez Miller on Jun 05, 2024
Verified
Amortization of a patent was ignored. This error would cause:
A) the period's net income to be overstated.
B) the period's net income to be understated.
C) the period's end assets to be understated.
D) None of the above answers are correct.
Amortization
The gradual reduction of a debt or the spreading out of capital expenses over a fixed period of time.
Net Income
The total profit of a company after all expenses and taxes have been subtracted from revenues.
- Comprehend the procedures for intangible assets in accounting, specifically amortization, impairment, and write-offs.
Verified Answer
SM
Sabrina MarieJun 08, 2024
Final Answer :
A
Explanation :
Ignoring the amortization of a patent would cause the period's net income to be overstated because expenses would be understated.
Learning Objectives
- Comprehend the procedures for intangible assets in accounting, specifically amortization, impairment, and write-offs.