What is amortization?
A)The process used to allocate the cost of natural resources.
B)The process used to allocate the cost of tangible fixed assets.
C)The process used to allocate the cost of capital leases, leasehold improvements and intangible assets.
D)The process used to allocate the cost of oil, gas, minerals and standing timber.

Question

Quizplus · Accepted Answer

Amortization is the process of systematically allocating the cost of intangible assets, capital leases, and leasehold improvements over their useful life. Option A refers to depletion, which is used for natural resources like oil, gas, etc. Option B refers to depreciation, which is used for tangible fixed assets like buildings, machinery, etc. Option D is also depletion, but for a specific type of natural resource like standing timber.

What Is Amortization