Question

which of the following expenses may a partnership elect to amortize?
a. a purchase of building and land?
b. professional fees paid after the partnership begins business
c. employment taxes paid by the partnership
d. advertising before the time partnership begins business

Answer 1

D - Advertising expenses before the partnership begins business may be amortized by it, because advertising will bring in benefits over a period of time, in the form of new business to the firm, once the business commences. Thus the advertising expense will be systematically written off over the period of its expected benefits.

Also, since it has been incurred before business commences, it cannot be expensed right way, but instead, has to be capitalised as an intangible asset first and then expensed (amortised) periodically.