Question

A pharmaceutical manufacturer has just developed and registered a patent for a
rare medicine. Which term will appear in its profit and loss account regarding the
cost of patent written-off.

Answer 1

The term called Amortization, will be used in the profit and loss account of the  pharmaceutical manufacturer regarding the patent cost written-off.

Explanation:

Amortization refers to the process in which initial cost of the assets gradually written-off.

The term called Amortization, will be used in the profit and loss account of the  pharmaceutical manufacturer regarding the patent cost written-off.

It is used for writing-off the intangible assets such as patents, trademarks, and copyrights.

Therefore, the newly developed and registered patent for the medicine will be written-off under the term Amortization.