Forming a corporation is more costly
than starting a sole proprietorship. The cost may include, for example,
attorneys fees, incorporation fees paid to the state, and other outlays
necessary to bring the corporation into existence. These costs are charged to an
asset account entitled organization costs. In the balance sheet, organization
costs appear under the other assets caption. Conceptually, organization costs
are an intangible asset that will benefit the corporation over its entire life.
But as a practical matter, most corporations amortize this asset to expense over
a period of only 5 years, as allowed under income tax regulations. Because the
amortization of organization costs usually is immaterial in dollar amount, this
convenient treatment is justified by the accounting principle of
materiality.
单选题
Organization costs are belong to assets.
【正确答案】
A
【答案解析】从段落第四句话These costs are charged to an asset account entitled organization costs，可以直接看出。
单选题
Organization costs must be amortized into expenses within 5 years.
【正确答案】
B
【答案解析】从倒数第二句But as a practical matter，most corporations amortize this asset to expense over a period of only 5 years…可以直接看出。
单选题
Organization costs is listed in income statement.
【正确答案】
B
【答案解析】段落中第四句话In the balance sheet, organization costs appear under the other assets caption.可以推导出公司筹备费列于资产负债表中而非收入表中。