If a company incurs legal costs in successfully defending its patent these costs are recorded by increasing
A)Legal Expense.
B)the Intangible Loss account.
C)the Patent account.
D)a revenue expenditure account.

Question

Quizplus · Accepted Answer

Legal costs incurred in successfully defending a patent are capitalized and added to the cost of the patent, increasing its value in the Patent account. This is because the legal costs incurred in defending the patent are necessary to maintain and protect the patent's value and are considered a cost of maintaining it. Therefore, the patent's value is increased by the amount of the legal costs incurred.

If a Company Incurs Legal Costs in Successfully Defending Its