The franchisee's initial fee is recorded as an expense on the income statement.
The franchisee's initial fee is recorded as an intangible asset and then expensed over the life of the franchise agreement.

Question

Quizplus · Accepted Answer

The franchisee's initial fee is recorded as an intangible asset and then expensed over the life of the franchise agreement, not as an expense on the income statement.

The Franchisee's Initial Fee Is Recorded as an Expense on the Income