Amortization is:Select one:A. The process of allocating to expense the cost of a plant asset to the accounting periods benefiting from its use. B. The systematic allocation of the cost of an intangible asset to expense over its estimated useful life. C. The process of allocating the cost of natural resources to periods when they are consumed. D. An accelerated form of expensing an asset's cost. E. Also called depletion.

Question

Business

Luna Goodman

19 February, 05:30

Amortization is:Select one:A. The process of allocating to expense the cost of a plant asset to the accounting periods benefiting from its use. B. The systematic allocation of the cost of an intangible asset to expense over its estimated useful life. C. The process of allocating the cost of natural resources to periods when they are consumed. D. An accelerated form of expensing an asset's cost. E. Also called depletion.

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Answers (1)

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Darren Wilson · Answer 1

The correct answer is option B.

Explanation:

Amortization is a technique used in accounting. It involves the process of spreading payment over multiple periods. In accounting, amortization refers to the allocation of the cost of intangible assets over its lifetime.

For instance, amortization of a loan means spreading the interest and principal of the loan over its lifetime. It means fixed monthly payments of interest and principal.