Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

8. Long Lived Assets

Intangible Assets and Amortization

Financial Accounting

8. Long Lived Assets

Intangible Assets and Amortization

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Multiple Choice

The cost allocation of an intangible asset is referred to as:

Amortization

Impairment

Depreciation

Depletion

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Verified step by step guidance

Step 1: Understand the concept of cost allocation for assets. Cost allocation refers to the systematic distribution of the cost of an asset over its useful life.

Step 2: Differentiate between tangible and intangible assets. Tangible assets are physical items like machinery or buildings, while intangible assets are non-physical items like patents, trademarks, or goodwill.

Step 3: Learn the specific term used for cost allocation of intangible assets. For intangible assets, the process of allocating their cost over their useful life is referred to as 'Amortization'.

Step 4: Clarify the other terms provided in the options: 'Depreciation' is used for tangible assets, 'Depletion' is used for natural resources, and 'Impairment' refers to a reduction in the recoverable amount of an asset.

Step 5: Conclude that the correct term for cost allocation of intangible assets is 'Amortization', as it specifically applies to non-physical assets.