Consider the investments in the following assets: 

1. Brand recognition 

2. Inventory 

3. Intellectual property 

4. Mailing list of clients 

How many of the above are considered intangible investments? 

(a) Only one 

(b) Only two

(c) Only three 

(d) All four 

Ans: c

Explanation: 

Intangible assets refer to non-physical assets that companies create or acquire. Unlike tangible assets, self-created intangible assets are not recorded on the balance sheet and therefore do not have a book value. 

The primary categories of intangible assets include goodwill, brand equity, and various forms of intellectual property such as trade secrets, patents, trademarks, and copyrights. Other examples include licensing agreements, customer lists, and research and development (R&D) activities.

Typically, the values of intangible assets are not reflected on the balance sheet. However, when companies engage in mergers or acquisitions, the value of the acquired intangible assets is recorded as a list on the acquiring company’s balance sheet.

Hence, option c is correct.

Read: Solved Economy PYQs With Explanation 2023 UPSC Prelims