Question

Jerand has written three books which have been copyrighted and published by a national publisher. He also invented and patented a desktop cover that can change a desk from sitting desk to a standing desk and back again using powered telescoping legs. He is using an accounting program to prepare his business accounting records. The program asks questions about the different aspects of his business and has asked him how the book copyrights and patent should be classified. Which of the following would be the proper designation for the copyrights and patent?
A. Owners' equity
B. Liabilities
C. Intangible assets
D. Fixed assets

Answer 1

Answer:

C. Intangible assets

Explanation:

Intangible assets include goodwill and intellectual property rights such as copyrights, trademarks, and patents. They are assets that are not physical in nature. In other words, they don't have a physical presence.

Intangible assets contrast tangible assets such as land, buildings, and motor vehicles. Intangible assets are classified as either definite in indefinite.  A business brand name is indefinite as it stays with business throughout its life. Intangible assets make significant contributions to the success of a company in the long-run.