Amortization is the systematic expensing of a portion of the cost of a fixed asset against sales.

Question

Quizplus · Accepted Answer

Amortization is the process of gradually expensing the cost of a fixed asset over its useful life against the sales or revenues it generates. This is done to reflect the decrease in the value of the asset over time due to wear and tear, obsolescence, or other factors. Amortization is commonly used for intangible assets like patents, copyrights, and trademarks, but it can also apply to tangible assets like buildings and equipment.

Amortization Is the Systematic Expensing of a Portion of the Cost