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Question

Which of the following would be amortized?


A

Franchises

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B

Equipment

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C

Oil wells

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D

Land

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Solution

The correct option is C

Oil wells


Answer (C): Oil wells

Explanation: Amortization is a bookkeeping method used periodically to bring down the book worth of an advance or an intangible resource throughout a set timeframe. Concerning an oil well, amortization centers around fanning out payments over the long run. When applied to a resource, amortization is like devaluation or depreciation.


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