Gifts Galore is a souvenir shop.They have just paid $2,000 for the exclusive rights to sell the latest hot fad "Talking Toads".They estimate the fad should last about six months.They also paid $250,000 to be the exclusive carrier of Olympic souvenirs for the next four years.How would each of these intangible assets be reported on the balance sheet?
$\begin{array}{ll}
&\text { Talking } & \text { Olympic } \
&\text { Toads } & \text { Souvenirs } \
A.&\text { Current asset } & \text { Current asset } \
B.&\text { Current asset } & \text { Non-current asset } \
C.&\text { Non-current asset } & \text { Current asset } \
D.&\text { Non-current asset } & \text { Non-current asset }
\end{array}$

Question

Gifts Galore is a souvenir shop.They have just paid $2,000 for the exclusive rights to sell the latest hot fad "Talking Toads".They estimate the fad should last about six months.They also paid $250,000 to be the exclusive carrier of Olympic souvenirs for the next four years.How would each of these intangible assets be reported on the balance sheet? 
$\begin{array}{ll}
&\text { Talking } & \text { Olympic } \
&\text { Toads } & \text { Souvenirs } \
A.&\text { Current asset } & \text { Current asset } \
B.&\text { Current asset } & \text { Non-current asset } \
C.&\text { Non-current asset } & \text { Current asset } \
D.&\text { Non-current asset } & \text { Non-current asset }
\end{array}$

Quizplus · Accepted Answer

The Talking Toads exclusive rights, expected to last about six months, would be classified as a current asset because it is anticipated to provide benefits within one year. The Olympic souvenirs exclusive rights, lasting for four years, would be considered a non-current (or long-term) asset, as they will provide benefits beyond one year.

Gifts Galore Is a Souvenir Shop A)Option a B)Option B C)Option C D)Option D

Gifts Galore Is a Souvenir Shop A)Option a
B)Option B
C)Option C
D)Option D