Amortization is:
A) the new value assigned to historically priced assets.
B) a balance sheet item that results in lower cash flow.
C) another term for bad debts profision.
D) the allocation of an asset's initial cost over time.

Question

Quizplus · Accepted Answer

Amortization refers to spreading out the cost of an intangible asset over its useful life, which allows companies to write off the expense of the asset gradually. This process does not directly affect cash flow, as it is a non-cash expense that impacts the income statement through depreciation expense.

Amortization Is