Question 1

In what way(s)can R&D costs be reported in an income statement organized by function?

Accepted Answer

A)  R&D expenses are reported as a separate function,item or line. 
B)  R&D is not identified as such but is included in another function,such as selling,general and administrative expenses. 
C)  R&D is not reported as such but since it has incurred expense,it becomes a part of the cost of goods sold. 
D)  All of these are correct. 
A)  R&D expenses are reported as a separate function,item or line. 
B)  R&D is not identified as such but is included in another function,such as selling,general and administrative expenses. 
C)  R&D is not reported as such but since it has incurred expense,it becomes a part of the cost of goods sold. 
D)  All of these are correct. D

Question 2

'Purchased goodwill' is:

Accepted Answer

A)  Recognized only in the unconsolidated financial statements. 
B)  Recognized only in the consolidated financial statements. 
C)  Recognized both in the unconsolidated and consolidated financial statements. 
D)  Never recognized. 
A)  Recognized only in the unconsolidated financial statements. 
B)  Recognized only in the consolidated financial statements. 
C)  Recognized both in the unconsolidated and consolidated financial statements. 
D)  Never recognized. C

Question 3

Some countries distinguish between fundamental and ____ research.

Accepted Answer

A)  Pure 
B)  Applied 
C)  Experimental 
D)  Theoretical 
A)  Pure 
B)  Applied 
C)  Experimental 
D)  Theoretical B

Question 4

The R&D intensity can also be computed as R&D expenses/operating expenses.

Accepted Answer

A) True 
 B)False

Question 5

What is a trademark?

Accepted Answer

A)  It is a document granted by a government or an official authority bestowing on the inventor of a product or manufacturing process the exclusive right to use or sell the invention or rights to it. 
B)  It is a contractual agreement that allows the holder to sell certain products or services. 
C)  It is the exclusive right to the publication,production and sale of the rights for an intellectual creation. 
D)  It is a distinctive identification of a manufactured product or of a service. 
A)  It is a document granted by a government or an official authority bestowing on the inventor of a product or manufacturing process the exclusive right to use or sell the invention or rights to it. 
B)  It is a contractual agreement that allows the holder to sell certain products or services. 
C)  It is the exclusive right to the publication,production and sale of the rights for an intellectual creation. 
D)  It is a distinctive identification of a manufactured product or of a service.

Question 6

Internally generated software cannot be capitalized and must therefore be expensed.

Accepted Answer

A) True 
 B)False

Question 7

Intangible assets having a finite useful life are not amortized but subject to an impairment test.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following examples is not an example of research activities?

Accepted Answer

A)  The search for alternative materials,devices,products,processes,systems,or services. 
B)  Activities aimed at obtaining new knowledge. 
C)  The design,construction,and testing of pre-production or pre-use prototypes and models. 
D)  The formulation,design,evaluation,and final selection of possible alternatives for new or improved materials,devices,products,processes,systems,or services. 
A)  The search for alternative materials,devices,products,processes,systems,or services. 
B)  Activities aimed at obtaining new knowledge. 
C)  The design,construction,and testing of pre-production or pre-use prototypes and models. 
D)  The formulation,design,evaluation,and final selection of possible alternatives for new or improved materials,devices,products,processes,systems,or services.

Question 9

Since economic benefits derived from intangible assets are uncertain,the cost should be expensed in the period when it incurs.Which principle is put into practice in this statement?

Accepted Answer

A)  Going concern principle 
B)  Matching principle 
C)  Prudence principle 
D)  Accrual principle 
A)  Going concern principle 
B)  Matching principle 
C)  Prudence principle 
D)  Accrual principle

Question 10

The acquisition value of soccer players is always expensed.

Accepted Answer

A) True 
 B)False

Question 11

Pharmaceutical companies are known to have a high R&D intensity.

Accepted Answer

A) True 
 B)False

Question 12

For each type of intangible assets,local GAAPs indicate precisely the duration of amortization.

Accepted Answer

A) True 
 B)False

Question 13

Recognition policies are the same for purchased and for internally generated intangible assets.

Accepted Answer

A) True 
 B)False

Question 14

The IASB accounting standard currently regulating goodwill accounting is:

Accepted Answer

A)  IAS 22 
B)  SFAS 142 
C)  IFRS 3 
D)  None of these 
A)  IAS 22 
B)  SFAS 142 
C)  IFRS 3 
D)  None of these

Question 15

There is no relationship between the company's R&D investment and its market value.

Accepted Answer

A) True 
 B)False

Question 16

Under the IASB standards,which of the following criteria is not required for R&D capitalization?

Accepted Answer

A)  Intention to complete the intangible asset and use or sell it. 
B)  Technical feasibility of completing the intangible asset so that it will be available for use or sale. 
C)  Availability of adequate technical,financial and other resources to complete the development and to use or sell the intangible asset. 
D)  Ability to measure reliably future economic benefits generated by the intangible asset. 
A)  Intention to complete the intangible asset and use or sell it. 
B)  Technical feasibility of completing the intangible asset so that it will be available for use or sale. 
C)  Availability of adequate technical,financial and other resources to complete the development and to use or sell the intangible asset. 
D)  Ability to measure reliably future economic benefits generated by the intangible asset.

Question 17

A patent is a document granted by a government or an official authority giving the inventor of a product or manufacturing process,the right to use or sell the invention or rights to it.What kind of rights are granted?

Accepted Answer

A)  Limited 
B)  Exclusive 
C)  Unique 
D)  Single 
A)  Limited 
B)  Exclusive 
C)  Unique 
D)  Single

Question 18

Which of the following examples is not an example of development activities?

Accepted Answer

A)  The design of tools,jigs,molds and dies involving new technology. 
B)  The search for,evaluation and final selection of,applications of research findings or other knowledge. 
C)  The design,construction,and operation of a pilot plant that is not of a scale economically feasible for commercial production. 
D)  The design,construction,and testing of a chosen alternative for new or improved materials,devices,products,processes,systems,or services. 
A)  The design of tools,jigs,molds and dies involving new technology. 
B)  The search for,evaluation and final selection of,applications of research findings or other knowledge. 
C)  The design,construction,and operation of a pilot plant that is not of a scale economically feasible for commercial production. 
D)  The design,construction,and testing of a chosen alternative for new or improved materials,devices,products,processes,systems,or services.

Question 19

Intangible assets are usually considered to have no physical substance and to be linked to legal rights.

Accepted Answer

A) True 
 B)False

Question 20

What is the duration of the protection offered by a patent?

Accepted Answer

A)  Unlimited. 
B)  Varies between countries. 
C)  Lasts generally 10 years. 
D)  Is generally not defined by law. 
A)  Unlimited. 
B)  Varies between countries. 
C)  Lasts generally 10 years. 
D)  Is generally not defined by law.

In what way(s)can R&D costs be reported in an income statement organized by function?

'Purchased goodwill' is:

Some countries distinguish between fundamental and ____ research.

The R&D intensity can also be computed as R&D expenses/operating expenses.

What is a trademark?

Internally generated software cannot be capitalized and must therefore be expensed.

Intangible assets having a finite useful life are not amortized but subject to an impairment test.

Which of the following examples is not an example of research activities?

Since economic benefits derived from intangible assets are uncertain,the cost should be expensed in the period when it incurs.Which principle is put into practice in this statement?

The acquisition value of soccer players is always expensed.

Pharmaceutical companies are known to have a high R&D intensity.

For each type of intangible assets,local GAAPs indicate precisely the duration of amortization.

Recognition policies are the same for purchased and for internally generated intangible assets.

The IASB accounting standard currently regulating goodwill accounting is:

There is no relationship between the company's R&D investment and its market value.

Under the IASB standards,which of the following criteria is not required for R&D capitalization?

A patent is a document granted by a government or an official authority giving the inventor of a product or manufacturing process,the right to use or sell the invention or rights to it.What kind of rights are granted?

Which of the following examples is not an example of development activities?

Intangible assets are usually considered to have no physical substance and to be linked to legal rights.

What is the duration of the protection offered by a patent?

Accounting: the Language of Business

Introduction to Financial Statements

Financial Statements: Interrelations and Construction

Accounting Principles and End-Of-Period Adjustments

Regulation of Accounting and Financial Reporting

Revenue Recognition Issues

Tangible Fixed Assets

Inventories

Financial Instruments in the Statement of Financial Position and Fair Value Accounting

Shareholders Equity

Liabilities and Provisions

Business Combinations

Income Statement Analysis

Balance Sheet Analysis

Statement of Cash Flows Construction

Statement of Cash Flows Analysis and Earnings Quality

Ratio Analysis, financial Analysis and Beyond

Filters

Exam 8: Intangible Assets

In what way(s)can R&D costs be reported in an income statement organized by function?

'Purchased goodwill' is:

Some countries distinguish between fundamental and ____ research.

The R&D intensity can also be computed as R&D expenses/operating expenses.

What is a trademark?

Internally generated software cannot be capitalized and must therefore be expensed.

Intangible assets having a finite useful life are not amortized but subject to an impairment test.

Which of the following examples is not an example of research activities?

Since economic benefits derived from intangible assets are uncertain,the cost should be expensed in the period when it incurs.Which principle is put into practice in this statement?

The acquisition value of soccer players is always expensed.

Pharmaceutical companies are known to have a high R&D intensity.

For each type of intangible assets,local GAAPs indicate precisely the duration of amortization.

Recognition policies are the same for purchased and for internally generated intangible assets.

The IASB accounting standard currently regulating goodwill accounting is:

There is no relationship between the company's R&D investment and its market value.

Under the IASB standards,which of the following criteria is not required for R&D capitalization?

A patent is a document granted by a government or an official authority giving the inventor of a product or manufacturing process,the right to use or sell the invention or rights to it.What kind of rights are granted?

Which of the following examples is not an example of development activities?

Intangible assets are usually considered to have no physical substance and to be linked to legal rights.

What is the duration of the protection offered by a patent?

Accounting: the Language of Business

Introduction to Financial Statements

Financial Statements: Interrelations and Construction

Accounting Principles and End-Of-Period Adjustments

Regulation of Accounting and Financial Reporting

Revenue Recognition Issues

Tangible Fixed Assets

Inventories

Financial Instruments in the Statement of Financial Position and Fair Value Accounting

Shareholders Equity

Liabilities and Provisions

Business Combinations

Income Statement Analysis

Balance Sheet Analysis

Statement of Cash Flows Construction

Statement of Cash Flows Analysis and Earnings Quality

Ratio Analysis, financial Analysis and Beyond

Filters