Select all that applyFor intangible assets used in the manufacturing of a product, amortization is (select all that apply):Multiple select question.expensed in the period incurredexpensed when the inventory is soldincluded in the cost of inventory
Question
Select all that applyFor intangible assets used in the manufacturing of a product, amortization is (select all that apply):Multiple select question.expensed in the period incurredexpensed when the inventory is soldincluded in the cost of inventory
Solution
The correct answers for the question are:
- Expensed in the period incurred
- Included in the cost of inventory
Explanation:
Intangible assets used in the manufacturing of a product are amortized over their useful life. This amortization is considered an expense and is recognized in the period it is incurred. This is because the benefit of the intangible asset is being consumed in that period.
In addition, the amortization of these intangible assets is also included in the cost of inventory. This is because the intangible asset is being used in the production process, and therefore its cost should be included in the cost of the product being manufactured.
However, the amortization is not expensed when the inventory is sold. This is because the expense has already been recognized in the period the amortization was incurred.
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