Asked by Charlie Giles on Jun 04, 2024
Verified
Organizational costs are capitalized by debiting an intangible asset entitled Organization Costs.
Organizational Costs
Expenses related to the formation of a corporation or business entity, including legal fees, registration fees, and promotional expenses.
Intangible Asset
An asset that lacks physical substance and is not financial in nature, such as patents, trademarks, and goodwill.
- Gain insight into the mechanisms and restrictions involved in the issuance of corporate shares.
Verified Answer
CB
Cristina BenitezJun 11, 2024
Final Answer :
False
Explanation :
Organizational costs are expensed as incurred according to U.S. GAAP, rather than being capitalized as an intangible asset.
Learning Objectives
- Gain insight into the mechanisms and restrictions involved in the issuance of corporate shares.