Question 1

Which of the following is considered research and development costs?

Accepted Answer

A)  Laboratory research aimed at discovery of new knowledge. 
B)  Application of research findings or other knowledge to a plan or design for a new product or process. 
C)  Conceptual formulation and design of possible product or process alternatives. 
D)  all of the above. 
A)  Laboratory research aimed at discovery of new knowledge. 
B)  Application of research findings or other knowledge to a plan or design for a new product or process. 
C)  Conceptual formulation and design of possible product or process alternatives. 
D)  all of the above.

Question 2

Internally generated goodwill associated with a business may be recorded as an asset when a firm offer to purchase that business unit has been received.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following principles best describes the current method of accounting for research and development costs?

Accepted Answer

A)  Associating cause and effect 
B)  Systematic and rational allocation 
C)  Income tax minimization 
D)  Immediate recognition as an expense 
A)  Associating cause and effect 
B)  Systematic and rational allocation 
C)  Income tax minimization 
D)  Immediate recognition as an expense

Question 4

Costs incurred internally to create intangibles are

Accepted Answer

A)  capitalized. 
B)  capitalized if they have an indefinite life. 
C)  expensed as incurred. 
D)  expensed only if they have a limited life. 
A)  capitalized. 
B)  capitalized if they have an indefinite life. 
C)  expensed as incurred. 
D)  expensed only if they have a limited life.

Question 5

Broadway Corporation was granted a patent on a product on January 1, 2008. To protect its patent, the corporation purchased on January 1, 2019 a patent on a competing product which was originally issued on January 10, 2015. Because of its unique plant, Broadway Corporation does not feel the competing patent can be used in producing a product. The cost of the competing patent should be

Accepted Answer

A)  amortized over a maximum period of 20 years. 
B)  amortized over a maximum period of 16 years. 
C)  amortized over a maximum period of 9 years. 
D)  expensed in 2019. 
A)  amortized over a maximum period of 20 years. 
B)  amortized over a maximum period of 16 years. 
C)  amortized over a maximum period of 9 years. 
D)  expensed in 2019.

Question 6

In a business combination, a company assigns the cost, where possible, to the identifiable tangible and intangible assets, with the remainder recorded as goodwill.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not an intangible asset?

Accepted Answer

A)  Trade name 
B)  Research and development costs 
C)  Franchise 
D)  Copyrights 
A)  Trade name 
B)  Research and development costs 
C)  Franchise 
D)  Copyrights

Question 8

Limited-life intangibles are reported at their

Accepted Answer

A)  replacement cost. 
B)  carrying amount unless impaired. 
C)  acquisition cost. 
D)  liquidation value. 
A)  replacement cost. 
B)  carrying amount unless impaired. 
C)  acquisition cost. 
D)  liquidation value.

Question 9

Intangible assets derive their value from the right (claim) to receive cash in the future.

Accepted Answer

A) True 
 B)False

Question 10

Internally generated goodwill should not be capitalized in the accounts.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following would not be considered an R & D activity?

Accepted Answer

A)  Adaptation of an existing capability to a particular requirement or customer's need. 
B)  Application of research findings or other knowledge to a plan for a new product or process. 
C)  Laboratory research aimed at discovery of new knowledge. 
D)  Conceptual formulation and design of possible product or process alternatives. 
A)  Adaptation of an existing capability to a particular requirement or customer's need. 
B)  Application of research findings or other knowledge to a plan for a new product or process. 
C)  Laboratory research aimed at discovery of new knowledge. 
D)  Conceptual formulation and design of possible product or process alternatives.

Question 12

Contra accounts must be reported for intangible assets in a manner similar to the reporting of property, plant, and equipment.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following costs incurred internally to create an intangible asset is generally expensed?

Accepted Answer

A)  Research phase costs. 
B)  Filing costs. 
C)  Legal costs. 
D)  All of these choices are correct. 
A)  Research phase costs. 
B)  Filing costs. 
C)  Legal costs. 
D)  All of these choices are correct.

Question 14

Which of the following methods of amortization is normally used for intangible assets?

Accepted Answer

A)  Sum-of-the-years'-digits 
B)  Straight-line 
C)  Units of production 
D)  Double-declining-balance 
A)  Sum-of-the-years'-digits 
B)  Straight-line 
C)  Units of production 
D)  Double-declining-balance

Question 15

All research phase and development phase costs are expensed as incurred.

Accepted Answer

A) True 
 B)False

Question 16

A patent should be amortized over

Accepted Answer

A)  twenty years. 
B)  its useful life. 
C)  its useful life or twenty years, whichever is longer. 
D)  its useful life or twenty years, whichever is shorter. 
A)  twenty years. 
B)  its useful life. 
C)  its useful life or twenty years, whichever is longer. 
D)  its useful life or twenty years, whichever is shorter.

Question 17

Which of the following should not be reported under the "Other income and expense" section of the income statement?

Accepted Answer

A)  Goodwill impairment losses. 
B)  Trade name amortization expense. 
C)  Recovery of impairment losses 
D)  All of these choices are correct. 
A)  Goodwill impairment losses. 
B)  Trade name amortization expense. 
C)  Recovery of impairment losses 
D)  All of these choices are correct.

Question 18

The cost of purchased patents should be amortized over the remaining legal life of the patent.

Accepted Answer

A) True 
 B)False

Question 19

Copyrights should be amortized over

Accepted Answer

A)  their legal life. 
B)  the life of the creator plus fifty years. 
C)  twenty years. 
D)  their useful life or legal life, whichever is shorter. 
A)  their legal life. 
B)  the life of the creator plus fifty years. 
C)  twenty years. 
D)  their useful life or legal life, whichever is shorter.

Question 20

Research and development costs are recorded as an intangible asset if it is felt they will provide economic benefits in future years.

Accepted Answer

A) True 
 B)False

Which of the following is considered research and development costs?

Internally generated goodwill associated with a business may be recorded as an asset when a firm offer to purchase that business unit has been received.

Which of the following principles best describes the current method of accounting for research and development costs?

Costs incurred internally to create intangibles are

In a business combination, a company assigns the cost, where possible, to the identifiable tangible and intangible assets, with the remainder recorded as goodwill.

Which of the following is not an intangible asset?

Limited-life intangibles are reported at their

Intangible assets derive their value from the right (claim) to receive cash in the future.

Internally generated goodwill should not be capitalized in the accounts.

Which of the following would not be considered an R & D activity?

Contra accounts must be reported for intangible assets in a manner similar to the reporting of property, plant, and equipment.

Which of the following costs incurred internally to create an intangible asset is generally expensed?

Which of the following methods of amortization is normally used for intangible assets?

All research phase and development phase costs are expensed as incurred.

A patent should be amortized over

Which of the following should not be reported under the "Other income and expense" section of the income statement?

The cost of purchased patents should be amortized over the remaining legal life of the patent.

Copyrights should be amortized over

Research and development costs are recorded as an intangible asset if it is felt they will provide economic benefits in future years.

Financial Reporting and Accounting Standards

Conceptual Framework for Financial Reporting

The Accounting Information System

Income Statement and Related Information

Statement of Financial Position and Statement of Cash Flows

Accounting and the Time Value of Money

Cash and Receivables

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Filters

Exam 12: Intangible Assets

Which of the following is considered research and development costs?

Internally generated goodwill associated with a business may be recorded as an asset when a firm offer to purchase that business unit has been received.

Which of the following principles best describes the current method of accounting for research and development costs?

Costs incurred internally to create intangibles are

In a business combination, a company assigns the cost, where possible, to the identifiable tangible and intangible assets, with the remainder recorded as goodwill.

Which of the following is not an intangible asset?

Limited-life intangibles are reported at their

Intangible assets derive their value from the right (claim) to receive cash in the future.

Internally generated goodwill should not be capitalized in the accounts.

Which of the following would not be considered an R & D activity?

Contra accounts must be reported for intangible assets in a manner similar to the reporting of property, plant, and equipment.

Which of the following costs incurred internally to create an intangible asset is generally expensed?

Which of the following methods of amortization is normally used for intangible assets?

All research phase and development phase costs are expensed as incurred.

A patent should be amortized over

Which of the following should not be reported under the "Other income and expense" section of the income statement?

The cost of purchased patents should be amortized over the remaining legal life of the patent.

Copyrights should be amortized over

Research and development costs are recorded as an intangible asset if it is felt they will provide economic benefits in future years.

Financial Reporting and Accounting Standards

Conceptual Framework for Financial Reporting

The Accounting Information System

Income Statement and Related Information

Statement of Financial Position and Statement of Cash Flows

Accounting and the Time Value of Money

Cash and Receivables

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Filters