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On January 1, Year 1, Vanguard Company purchased a copyright for $12,000. Vanguard estimated the remaining useful life of the copyright to be 6 years.

-Which of the following correctly shows the effect of the first year's amortization of Vanguard's copyright?

A)Option A
B)Option B
C)Option C
D)Option D

Question

[The following information applies to the questions displayed below.]

On January 1, Year 1, Vanguard Company purchased a copyright for $12,000. Vanguard estimated the remaining useful life of the copyright to be 6 years.

-Which of the following correctly shows the effect of the first year's amortization of Vanguard's copyright?

A)Option A 
B)Option B 
C)Option C 
D)Option D

Quizplus · Accepted Answer

Amortization decreases assets (copyright)and stockholders' equity (retained earnings).It increases expenses,which decreases net income.It does not affect cash flows.

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