Question 1

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 2

A cash-generating unit is the smallest identifiable group of assets in a business that can generate cash flow independently of the cash flows from the business's other assets.

Accepted Answer

A) True 
 B)False

Question 3

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 4

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 5

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 6

Amortization of limited-life intangible assets should not be impacted by expected residual values.

Accepted Answer

A) True 
 B)False

Question 7

Accounting for impairments for limited-life intangible assets follows the same rules used to account for impairments of plant and equipment.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following characteristics do intangible assets possess?

Accepted Answer

A) Physical existence. 
B) Claim to a specific amount of cash in the future. 
C) Long-lived. 
D) Held for resale. 
A) Physical existence. 
B) Claim to a specific amount of cash in the future. 
C) Long-lived. 
D) Held for resale.

Question 9

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 10

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

Accepted Answer

A) True 
 B)False

Question 11

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 12

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 13

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 14

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 15

The reason goodwill is sometimes referred to as a master valuation account is because

Accepted Answer

A) it represents the purchase price of a business that is about to be sold. 
B) it is the difference between the fair value of the net identifiable assets as compared with the purchase price of the acquired business. 
C) the value of a business is computed without consideration of goodwill and then goodwill is added to arrive at a master valuation. 
D) it is the only account in the financial statements that is based on value, all other accounts are recorded at an amount other than their value. 
A) it represents the purchase price of a business that is about to be sold. 
B) it is the difference between the fair value of the net identifiable assets as compared with the purchase price of the acquired business. 
C) the value of a business is computed without consideration of goodwill and then goodwill is added to arrive at a master valuation. 
D) it is the only account in the financial statements that is based on value, all other accounts are recorded at an amount other than their value.

Question 16

Which of the following costs should be excluded from research and development expense?

Accepted Answer

A) Modification of the design of a product 
B) Acquisition of R & D equipment for use on a current project only 
C) Cost of marketing research for a new product 
D) Engineering activity required to advance the design of a product to the manufacturing stage 
A) Modification of the design of a product 
B) Acquisition of R & D equipment for use on a current project only 
C) Cost of marketing research for a new product 
D) Engineering activity required to advance the design of a product to the manufacturing stage

Question 17

Research and development costs that result in patents may be capitalized to the extent of the fair value of the patent.

Accepted Answer

A) True 
 B)False

Question 18

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 19

Which intangible assets are amortized?

Accepted Answer

The answer of Which intangible assets are amortized?  ...

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 12: Intangible Assets

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

A cash-generating unit is the smallest identifiable group of assets in a business that can generate cash flow independently of the cash flows from the business's other assets.

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

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

Which of the following is not an intangible asset?

Amortization of limited-life intangible assets should not be impacted by expected residual values.

Accounting for impairments for limited-life intangible assets follows the same rules used to account for impairments of plant and equipment.

Which of the following characteristics do intangible assets possess?

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

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

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

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

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

Which of the following is considered research and development costs?

The reason goodwill is sometimes referred to as a master valuation account is because

Which of the following costs should be excluded from research and development expense?

Research and development costs that result in patents may be capitalized to the extent of the fair value of the patent.

Limited-life intangibles are reported at their

Which intangible assets are amortized?

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

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

Current Liabilities, Provisions, and Contingencies

Non-Current Liabilities

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

Presentation and Disclosure in Financialreporting

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