Which Of The Following Assets Are Amortized? (Check All That Apply.)

Amortization is applied on Intangible Assets (IA) using straight-line method. It is applied on Intangible Assets by following Matching Concept that revenue earned due to the usage of intangible assets should be matched with amortization expense incurred in the relevant accounting period. IA are recorded under the headings of Intangible Assets on Balance Sheet while amortization expense is charged to expense in Income Statement. Examples of IA include Goodwill (which is never amortized but it is tested for Impairment), Trademark, Franchise, Copyrights, Patents, etc.

The correct options of this multiple choice question (mcq) are A and C, as explained below:

Copyright

A copyright is the exclusive rights given to the original writer, author or creator, for creating its own work, content, etc., under copyrights law to copy, reproduce, publish, sell and redistribute the original work. Copyrights protect the original work of writer / author from copying, reproducing, publishing or redistributing by others. It is an Intangible Asset and amortized over its useful life.

Patent

It is a right given to inventor to manufacture, use and sell its invention. It is also an intangible asset which is allowed to be amortized over its useful life.

The option B is not correct choice here as coal mine is a tangible asset and a natural resource, so it is depleted rather than amortized. It is depleted over its usage or extracted period of time.

The option D is incorrect choice here as Building is a Tangible and Non-Current Asset which is depreciated over its useful life rather amortized.

The option E of this multiple choice question is also a wrong choice here as it is neither depreciated nor amortized since Land has unlimited useful life so it is never depreciated. Also, it is a free Gift of Allah (God). However, land improvements such as parking lots, drainage, the building constructed on it, etc., is depreciated over its useful life.