A large publicly held company has developed and registered a trademark during 2008. How should the cost of developing and registering the trademark be accounted for if it is considered to have a limited life?
A) Charged to an asset account that should not be amortized
B) Amortized over 10 years regardless of its useful life
C) Expensed as incurred
D) Amortized over its useful life

Question

Quizplus · Accepted Answer

Trademarks with a limited life should be amortized over their useful life. This approach matches the expense of the trademark with the period in which it generates revenue, adhering to the matching principle in accounting.

A Large Publicly Held Company Has Developed and Registered a Trademark