Question 1

Wriglee, Inc. went to court this year and successfully defended its patent from infringement 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 2

Under what circumstances is it appropriate to record goodwill in the accounts? How should goodwill, properly recorded on the books, be written off in accordance with generally accepted accounting principles?

Accepted Answer

Goodwill is recorded only when it is acq

Question 3

Dennis Company purchases Miles Company for $5,000,000 cash on January 1, 2015. The book value of Miles Company's net assets reported on its December 31, 2014 financial statement was $3,800,000. An analysis indicated that the fair value of Miles's tangible assets exceeded the book value by $600,000, and the fair value of identifiable intangible assets exceeded book value by $320,000. Determine the fair value of identifiable net assets used to record goodwill.

Accepted Answer

A)  $280,000. 
B)  $4,720,000. 
C)  $4,400,000. 
D)  $3,800,000. 
A)  $280,000. 
B)  $4,720,000. 
C)  $4,400,000. 
D)  $3,800,000.

Question 4

As in U.S. GAAP, under IFRS the costs associated with research and development are segregated into two components.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

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

Question 6

IFRS permits some capitalization of internally generated intangible assets, if it is probable there will be a future benefit and the amount can be readily measured.

Accepted Answer

A) True 
 B)False

Question 7

IFRS allows reversal of impairment losses when

Accepted Answer

A)  the reversal is greater than the amount of the original impairment. 
B)  the reversal falls in a subsequent fiscal year of the company's operations. 
C)  there has been a change in economic conditions or in the expected use of the asset. 
D)  reversal of impairment losses is never allowed. 
A)  the reversal is greater than the amount of the original impairment. 
B)  the reversal falls in a subsequent fiscal year of the company's operations. 
C)  there has been a change in economic conditions or in the expected use of the asset. 
D)  reversal of impairment losses is never allowed.

Question 8

The primary IFRS related to intangible assets and impairments is found in

Accepted Answer

A)  IAS 38 and IAS 10. 
B)  IAS 16 and IAS 36. 
C)  IAS 1 and IAS 34. 
D)  IAS 38 and IAS 36. 
A)  IAS 38 and IAS 10. 
B)  IAS 16 and IAS 36. 
C)  IAS 1 and IAS 34. 
D)  IAS 38 and IAS 36.

Question 9

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.

Question 10

Impairment of copyrights.Presented below is information related to copyrights owned by Wamser Corporation at December 31, 2014.   Assume Wamser will continue to use this asset in the future. As of December 31, 2014, the copyrights have a remaining useful life of 5 years.

Instructions

(a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2014.
(b) Prepare the journal entry to record amortization expense for 2015.
(c) The fair value of the copyright at December 31, 2015 is $2,500,000. Prepare the journal entry (if any) necessary to record this increase in fair value.

Accepted Answer

The answer of Impairment of copyrights.Presented below is information related...

Question 11

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 12

On January 2, 2014, Klein Co. bought a trademark from Royce, Inc. for $1,600,000. An independent research company estimated that the remaining useful life of the trademark was 10 years. Its unamortized cost on Royce's books was $1,200,000. In Klein's 2014 income statement, what amount should be reported as amortization expense?

Accepted Answer

A)  $160,000. 
B)  $120,000. 
C)  $ 80,000. 
D)  $ 60,000. 
A)  $160,000. 
B)  $120,000. 
C)  $ 80,000. 
D)  $ 60,000.

Question 13

Which characteristic is not possessed by intangible assets?

Accepted Answer

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

Question 14

Costs in the research phase are always expensed under both IFRS and U.S. GAAP.

Accepted Answer

A) True 
 B)False

Question 15

When a company develops a trademark the costs directly related to securing it should generally be capitalized. Which of the following costs associated with a trademark would not be capitalized?

Accepted Answer

A)  Attorney fees. 
B)  Consulting fees. 
C)  Research and development costs. 
D)  Design costs. 
A)  Attorney fees. 
B)  Consulting fees. 
C)  Research and development costs. 
D)  Design costs.

Question 16

The following costs are incurred during the research and development phases of a laser bone scanner   Identify which of these are development phase items and will be immediately expensed underU.S. GAAP and IFRS.U.S. GAAP IFRS

Accepted Answer

A)  $1,200,000 $1,200,000 
B)  2,400,000 1,400,000 
C)  2,400,000 3,400,000 
D)  3,400,000 3,400,000 
A)  $1,200,000 $1,200,000 
B)  2,400,000 1,400,000 
C)  2,400,000 3,400,000 
D)  3,400,000 3,400,000

Question 17

Trademarks, newspaper mastheads, and internet domain names are all examples of

Accepted Answer

A)  contract-related intangible assets 
B)  artistic-related intangible assets 
C)  marketing-related intangible assets 
D)  customer-related intangible assets 
A)  contract-related intangible assets 
B)  artistic-related intangible assets 
C)  marketing-related intangible assets 
D)  customer-related intangible assets

Question 18

The costs of organizing a corporation include legal fees, fees paid to the state of incorporation, fees paid to promoters, and the costs of meetings for organizing the promoters. These costs are said to benefit the corporation for the entity's entire life. These costs should be

Accepted Answer

A)  capitalized and never amortized. 
B)  capitalized and amortized over 40 years. 
C)  capitalized and amortized over 5 years. 
D)  expensed as incurred. 
A)  capitalized and never amortized. 
B)  capitalized and amortized over 40 years. 
C)  capitalized and amortized over 5 years. 
D)  expensed as incurred.

Question 19

Why does the accounting profession make a distinction between internally created intangible assets and purchased intangible assets?

Accepted Answer

When intangible assets are created inter

Question 20

Companies should test indefinite life intangible assets at least annually for

Accepted Answer

A)  recoverability. 
B)  amortization. 
C)  impairment. 
D)  estimated useful life. 
A)  recoverability. 
B)  amortization. 
C)  impairment. 
D)  estimated useful life.

Exam 12: Intangible Assets

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

Under what circumstances is it appropriate to record goodwill in the accounts? How should goodwill, properly recorded on the books, be written off in accordance with generally accepted accounting principles?

As in U.S. GAAP, under IFRS the costs associated with research and development are segregated into two components.

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

IFRS permits some capitalization of internally generated intangible assets, if it is probable there will be a future benefit and the amount can be readily measured.

IFRS allows reversal of impairment losses when

The primary IFRS related to intangible assets and impairments is found in

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

Which of the following is not an intangible asset?

Which characteristic is not possessed by intangible assets?

Costs in the research phase are always expensed under both IFRS and U.S. GAAP.

When a company develops a trademark the costs directly related to securing it should generally be capitalized. Which of the following costs associated with a trademark would not be capitalized?

The following costs are incurred during the research and development phases of a laser bone scanner Identify which of these are development phase items and will be immediately expensed underU.S. GAAP and IFRS.U.S. GAAP IFRS

Trademarks, newspaper mastheads, and internet domain names are all examples of

The costs of organizing a corporation include legal fees, fees paid to the state of incorporation, fees paid to promoters, and the costs of meetings for organizing the promoters. These costs are said to benefit the corporation for the entity's entire life. These costs should be

Why does the accounting profession make a distinction between internally created intangible assets and purchased intangible assets?

Companies should test indefinite life intangible assets at least annually for

Financial Accounting and Accounting Standards

Conceptual Framework for Financial Reporting

The Accounting Information System

Income Statement and Related Information

Balance Sheet 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

Current Liabilities and Contingencies

Long-Term Liabilities

Stockholders Equity

Dilutive Securities and Earnings Per Share

Investments

Revenue Recognition

Accounting for Income Taxes

Accounting for Pensions and Postretirement Benefits

Accounting for Leases

Accounting Changes and Error Analysis

Statement of Cash Flows

Full Disclosure in Financial Reporting

Appendix

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