Answered: If a company acquires a brand name, it…

If a company acquires a brand name, it should be A)Depreciated over its useful life B)Amortized over its useful life. C)Writen-off as needed D)Never recognized on the balance sheet

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

If a company acquires a brand name, it should be

A)Depreciated over its useful life

B)Amortized over its useful life.

C)Writen-off as needed

D)Never recognized on the balance sheet

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

Expert Solution

Step 1

Brand name acquisition is an asset and should be reported on the assets side of the balancesheet.

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