Which of the following properly describes the accounting for a patent?
A)Research and development costs associated with a patent are capitalized.
B)The patent will be amortized over its useful life.
C)Patent amortization expense is accounted for within the accumulated depreciation account.
D)A patent's legal life extends to 70 years after the death of the inventor.

Question

Quizplus · Accepted Answer

A patent is an intangible asset that provides exclusive rights to an inventor for a period of time, usually 20 years. The costs associated with obtaining a patent, such as legal fees, are capitalized as an intangible asset. The patent is then amortized over its useful life, which is typically the same as its legal life. Therefore, option B is the correct answer as it describes the proper accounting treatment for a patent. Options A, C, and D are incorrect as they do not accurately describe the accounting for a patent.

Which of the Following Properly Describes the Accounting for a Patent