Question 1

The cost of an intangible asset includes all of the following except

Accepted Answer

A)  purchase price. 
B)  legal fees. 
C)  other incidental expenses. 
D)  all of these are included. 
A)  purchase price. 
B)  legal fees. 
C)  other incidental expenses. 
D)  all of these are included.

Question 2

The cost of acquiring a customer list from another company is recorded as an intangible asset.

Accepted Answer

A) True 
 B)False

Question 3

Recovery of impairment is recognized for all the following except

Accepted Answer

A)  Patent held for sale. 
B)  Patent held for use. 
C)  Trademark. 
D)  Goodwill. 
A)  Patent held for sale. 
B)  Patent held for use. 
C)  Trademark. 
D)  Goodwill.

Question 4

All intangibles are subject to periodic consideration of impairment with corresponding potential write-downs.

Accepted Answer

A) True 
 B)False

Question 5

Intangible assets are reported on the statement of financial position

Accepted Answer

A)  with an accumulated depreciation account. 
B)  in the property, plant, and equipment section. 
C)  as a separate item. 
D)  None of these choices are correct. 
A)  with an accumulated depreciation account. 
B)  in the property, plant, and equipment section. 
C)  as a separate item. 
D)  None of these choices are correct.

Question 6

Which of the following costs would be capitalized?

Accepted Answer

A)  Acquisition cost of equipment to be used on current research project only. 
B)  Engineering costs incurred to advance the product to the full production stage. 
C)  Cost of research to determine whether a market for the product exists. 
D)  Salaries of research staff. 
A)  Acquisition cost of equipment to be used on current research project only. 
B)  Engineering costs incurred to advance the product to the full production stage. 
C)  Cost of research to determine whether a market for the product exists. 
D)  Salaries of research staff.

Question 7

Which of the following does not describe intangible assets?

Accepted Answer

A)  They lack physical existence. 
B)  They are monetary assets. 
C)  They provide long-term benefits. 
D)  They are classified as long-term assets. 
A)  They lack physical existence. 
B)  They are monetary assets. 
C)  They provide long-term benefits. 
D)  They are classified as long-term assets.

Question 8

A loss on impairment of an intangible asset is the difference between the asset's

Accepted Answer

A)  carrying amount and the expected future net cash flows. 
B)  carrying amount and its recoverable amount. 
C)  recoverable amount and the expected future net cash flows. 
D)  book value and its fair value. 
A)  carrying amount and the expected future net cash flows. 
B)  carrying amount and its recoverable amount. 
C)  recoverable amount and the expected future net cash flows. 
D)  book value and its fair value.

Question 9

The total amount of patent cost amortized to date is usually

Accepted Answer

A)  shown in a separate Accumulated Patent Amortization account which is shown contra to the Patent account. 
B)  shown in the current income statement. 
C)  reflected as credits in the Patent account. 
D)  reflected as a contra property, plant and equipment item. 
A)  shown in a separate Accumulated Patent Amortization account which is shown contra to the Patent account. 
B)  shown in the current income statement. 
C)  reflected as credits in the Patent account. 
D)  reflected as a contra property, plant and equipment item.

Question 10

IFRS permits reversals of impairment losses for all limited and indefinite-life intangible assets.

Accepted Answer

A) True 
 B)False

Question 11

IFRS requires that start-up costs and initial operating losses during the early years be capitalized.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following intangible assets should not be amortized?

Accepted Answer

A)  Copyrights 
B)  Customer lists 
C)  Perpetual franchises 
D)  All of these intangible assets should be amortized. 
A)  Copyrights 
B)  Customer lists 
C)  Perpetual franchises 
D)  All of these intangible assets should be amortized.

Question 13

In a business combination, the excess of the cost of the purchase over the fair value of the identifiable net assets purchased is

Accepted Answer

A)  other assets. 
B)  indirect costs. 
C)  goodwill. 
D)  a bargain purchase. 
A)  other assets. 
B)  indirect costs. 
C)  goodwill. 
D)  a bargain purchase.

Question 14

Which characteristic is not possessed by intangible assets?

Accepted Answer

A)  Physical existence. 
B)  Identifiable. 
C)  Result in future benefits. 
D)  Expensed over current and/or future years. 
A)  Physical existence. 
B)  Identifiable. 
C)  Result in future benefits. 
D)  Expensed over current and/or future years.

Question 15

When a patent is amortized, the credit is usually made to

Accepted Answer

A)  the Patents account. 
B)  an Accumulated Amortization account. 
C)  an Accumulated Depreciation account. 
D)  an expense account. 
A)  the Patents account. 
B)  an Accumulated Amortization account. 
C)  an Accumulated Depreciation account. 
D)  an expense account.

Question 16

Wriglee, Inc. went to court this year and successfully defended its patent from infringe-ment by a competitor. The cost of this defense should be charged to

Accepted Answer

A)  patents and amortized over the legal life of the patent. 
B)  legal fees and amortized over 5 years or less. 
C)  expenses of the period. 
D)  patents and amortized over the remaining useful life of the patent. 
A)  patents and amortized over the legal life of the patent. 
B)  legal fees and amortized over 5 years or less. 
C)  expenses of the period. 
D)  patents and amortized over the remaining useful life of the patent.

Question 17

After an impairment loss is recorded for goodwill, the recoverable amount becomes the basis for the impaired asset and is used to calculate amortization in future periods.

Accepted Answer

A) True 
 B)False

Question 18

Impairment testing is conducted annually for both limited-life and indefinite-life intangible assets.

Accepted Answer

A) True 
 B)False

Question 19

Recoveries of impairments for intangible long-lived assets are reported in "other income and expense" on the income statement.

Accepted Answer

A) True 
 B)False

Question 20

If a company constructs a laboratory building to be used as a research and development facility, the cost of the laboratory building is matched against earnings as

Accepted Answer

A)  research and development expense in the period(s) of construction. 
B)  depreciation deducted as part of research and development costs. 
C)  depreciation or immediate write-off depending on company policy. 
D)  an expense at such time as productive research and development has been obtained from the facility. 
A)  research and development expense in the period(s) of construction. 
B)  depreciation deducted as part of research and development costs. 
C)  depreciation or immediate write-off depending on company policy. 
D)  an expense at such time as productive research and development has been obtained from the facility.

The cost of an intangible asset includes all of the following except

The cost of acquiring a customer list from another company is recorded as an intangible asset.

Recovery of impairment is recognized for all the following except

All intangibles are subject to periodic consideration of impairment with corresponding potential write-downs.

Intangible assets are reported on the statement of financial position

Which of the following costs would be capitalized?

Which of the following does not describe intangible assets?

A loss on impairment of an intangible asset is the difference between the asset's

The total amount of patent cost amortized to date is usually

IFRS permits reversals of impairment losses for all limited and indefinite-life intangible assets.

IFRS requires that start-up costs and initial operating losses during the early years be capitalized.

Which of the following intangible assets should not be amortized?

In a business combination, the excess of the cost of the purchase over the fair value of the identifiable net assets purchased is

Which characteristic is not possessed by intangible assets?

When a patent is amortized, the credit is usually made to

Wriglee, Inc. went to court this year and successfully defended its patent from infringe-ment by a competitor. The cost of this defense should be charged to

After an impairment loss is recorded for goodwill, the recoverable amount becomes the basis for the impaired asset and is used to calculate amortization in future periods.

Impairment testing is conducted annually for both limited-life and indefinite-life intangible assets.

Recoveries of impairments for intangible long-lived assets are reported in "other income and expense" on the income statement.

If a company constructs a laboratory building to be used as a research and development facility, the cost of the laboratory building is matched against earnings as

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

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Exam 12: Intangible Assets

The cost of an intangible asset includes all of the following except

The cost of acquiring a customer list from another company is recorded as an intangible asset.

Recovery of impairment is recognized for all the following except

All intangibles are subject to periodic consideration of impairment with corresponding potential write-downs.

Intangible assets are reported on the statement of financial position

Which of the following costs would be capitalized?

Which of the following does not describe intangible assets?

A loss on impairment of an intangible asset is the difference between the asset's

The total amount of patent cost amortized to date is usually

IFRS permits reversals of impairment losses for all limited and indefinite-life intangible assets.

IFRS requires that start-up costs and initial operating losses during the early years be capitalized.

Which of the following intangible assets should not be amortized?

In a business combination, the excess of the cost of the purchase over the fair value of the identifiable net assets purchased is

Which characteristic is not possessed by intangible assets?

When a patent is amortized, the credit is usually made to

Wriglee, Inc. went to court this year and successfully defended its patent from infringe-ment by a competitor. The cost of this defense should be charged to

After an impairment loss is recorded for goodwill, the recoverable amount becomes the basis for the impaired asset and is used to calculate amortization in future periods.

Impairment testing is conducted annually for both limited-life and indefinite-life intangible assets.

Recoveries of impairments for intangible long-lived assets are reported in "other income and expense" on the income statement.

If a company constructs a laboratory building to be used as a research and development facility, the cost of the laboratory building is matched against earnings as

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