. Amortization of a patent was ignored. This error would cause A. the period’s net income to be overstated. B. the period’s net income to be understated. C. the period end assets to be understated. D. None of the above
A. The
period's net income to be overstated. Amortization refers to the process of
using a predetermined schedule to pay off a debt. It can also mean spreading
out of capital expenditures over a period of time (for intangible assets).
In the event that the amortization is ignored, the respective payments will
not be deducted and as a result, net income will be overstated.
