Question

Which of the following is an intangible asset?

1) Deferred income taxes.
2) Prepaid pension costs.
3) Customer lists.
4) Restricted cash.

Answer 1

Among the given choices, customer lists are considered an intangible asset as they represent non-physical value in the form of relationships and potential sales a company can derive from them.

Step-by-step explanation:

The intangible asset among the options provided is customer lists. An intangible asset is an asset that is not physical in nature, and customer lists represent information and relationships with customers that a company can leverage for sales, which has value but is non-physical.

Deferred income taxes and prepaid pension costs are more akin to prepayments or potential claims against future cash flows rather than intangible assets. Restricted cash is a tangible asset because it is cash that simply has restrictions on its use. It is important to understand the difference between tangible and intangible assets when assessing a company's balance sheet.