If a company incurs legal costs in unsuccessfully defending its patent, these costs would be debited to

A) Legal Expense.
B) Intangible Loss account.
C) Patent account.
D) Other Comprehensive Income.

Question

If a company incurs legal costs in unsuccessfully defending its patent, these costs would be debited toA) Legal Expense.B) Intangible Loss account.C) Patent account.D) Other Comprehensive Income.

Sabrina Saleh · Accepted Answer

Final Answer : A, Explanation :  Legal costs incurred in unsuccessfully defending a patent are considered operating expenses and should be recorded as Legal Expense. They do not directly increase the value of the patent or create a new intangible asset, hence are treated as an expense in the period they are incurred.

If a company incurs legal costs in unsuccessfully defending its patent, these costs would be debited to

A) Legal Expense.
B) Intangible Loss account.
C) Patent account.
D) Other Comprehensive Income.

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