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ACC 304 Week 11 Final Exam: Intangible Assets and Related Accounting Concepts

This final exam assesses knowledge of intangible assets and related accounting concepts, including amortization and valuation techniques.

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    ACC 304 Week 11 Final Exam: Intangible Assets and Related Accounting Concepts ACC 304 Week 11 Final Exam TRUE - FALSE — Conceptual 1. Intangible assets derive their value from the right (claim) to receive cash in the future. True False 2. Internally created intangibles are recorded at cost. True False 3. Internally generated intangible assets are initially recorded at fair value. True False 4. Amortization of limited - life intangible assets should not be impacted by expected residual values. True False 5. Some intangible assets are not required to be amortized every year. True False 6. Limited - life intangibles are amortized by systematic charges to expense over their useful life. True False

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    7. The cost of acquiring a customer list from another company is recorded as an intangible asset. True False 8. The cost of purchased patents should be amortized over the remaining legal life of the patent. True False 9. If a new patent is acquired through modification of an existing patent, the remaining book value of the original patent may be amortized over the life of the new patent. True False 10. In a business combination, a company assigns the cost, where possible, to the identifiable tangible and intangible assets, with the remainder recorded as goodwill. True False 11. Internally generated goodwill should not be capitalized in the accounts. True False 12. 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. True False 13. All intangibles are subject to periodic consideration of impairment with corresponding potential write - downs. True False True False

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    14. If the fair value of an unlimited life intangible other than goodwill is less than its book value, an impairment loss must be recognized. True False 15. If market value of an impaired asset recovers after an impairment has been recognized, the impairment may be reversed in a subsequent period. True False 16. The same recoverability test that is used for impairments of property, plant, and equipment is used for impairments of indefinite - life intangibles. True False 17. Periodic alterations to existing products are an example of research and development costs. True False 18. Research and development costs that result in patents may be capitalized to the extent of the fair value of the patent. True False 19. Research and development costs are recorded as an intangible asset if it is felt they will provide economic benefits in future years. True False 20. Contra accounts must be reported for intangible asset s in a manner similar to accumu lated depreciation and property, plant, and equipment. True False MULTIPLE CHOICE 21. Which of the following does not describe intangible assets? a. They lack physical existence. b. They are financial instruments.

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    c. They provide long - term benefits. d. They are classified as long - term assets. 22. Which of the following characteristics do intangible assets possess? a. Physical existence. b. Claim to a specific amount of cash in the future. c. Long - lived. d. Held for resale. 23. Which characteristic is not possessed by intangible assets? a. Physical existence. b. Short - lived. c. Result in future benefits. d. Expensed over current and/or future years. 24. Costs incurred internally to create intangibles are a. capitalized. b. capitalized if they have an indefinite life. c. expensed as incurred. d. expensed only if they have a limited life. 25. Which of the following costs incurred internally to create an intangible asset is generally expensed? a. Research and development costs. b. Filing costs. c. Legal costs. d. All of the above. 26. Which of the following methods of amortization is normally used for intangible assets? a. Sum - of - the - years' - digits b. Straight - line c. Units of production d. Double - declining - balance 27. The cost of an intangible asset includes all of the following except a. purchase price. b. legal fees.

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