For the purpose of recording transactions into financial accounts, how is amortization expense different from depreciation expense?
  1. It is the cost allocation of leased equipment versus purchased equipment
  2. It is the cost allocation of credit card transactions versus equipment
  3. It is the cost allocation of loan interest versus amount of principle
  4. It is the cost allocation of intangible versus tangible property.
Explanation
Answer: D- For the purpose of recording transactions into financial accounts, amortization expense different from depreciation expense in that it is the cost allocation of intangible versus tangible property. Amortization Expenses are intangible, such as purchased goodwill, while Depreciation Expense is based on tangible property.
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