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

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ACC 304 Week 11 Final Exam: IntangibleAssets and Related Accounting ConceptsACC 304 Week 11 Final ExamTRUE-FALSE—Conceptual1.Intangible assets derive their value from the right (claim) to receive cash in the future.TrueFalse2.Internally created intangibles are recorded at cost.TrueFalse3.Internally generated intangible assets are initially recorded at fair value.TrueFalse4.Amortization of limited-life intangible assets should not be impacted by expected residualvalues.TrueFalse5.Some intangible assets are not required to be amortized every year.TrueFalse6.Limited-life intangibles are amortized by systematic charges to expense over their usefullife.TrueFalse

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7.The cost ofacquiring a customer list from another company is recorded as an intangibleasset.TrueFalse8.The cost of purchased patents should be amortized over the remaining legal life of thepatent.TrueFalse9.If a new patent is acquired through modification of an existing patent, the remaining bookvalue of the original patent may be amortized over the life of the new patent.TrueFalse10.In a business combination, a company assigns the cost, where possible, to the identifiabletangible and intangible assets, with the remainder recorded as goodwill.TrueFalse11.Internally generated goodwill should not be capitalized in the accounts.TrueFalse12.Internally generated goodwill associated with a business may be recorded as an asset whena firm offer to purchase that business unit has been received.TrueFalse13.All intangibles are subject to periodic consideration of impairment with correspondingpotential write-downs.TrueFalseTrueFalse

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14.If the fair value of anunlimited life intangible other than goodwill is less than its bookvalue, an impairment loss must be recognized.TrueFalse15.If market value of an impaired asset recovers after an impairment has been recognized, theimpairment may be reversed in a subsequent period.TrueFalse16.The same recoverability test that is used for impairments of property, plant, and equipmentis used for impairments of indefinite-life intangibles.TrueFalse17.Periodic alterations to existing products are anexample of research and development costs.TrueFalse18.Research and development costs that result in patents may be capitalized to the extent ofthe fair value of the patent.TrueFalse19.Research and development costs are recorded as an intangible asset if it is felt they willprovide economic benefits in future years.TrueFalse20.Contra accounts must be reported for intangible assets in a manner similar to accumulateddepreciation and property, plant, and equipment.TrueFalseMULTIPLE CHOICE21.Which of the following doesnotdescribe 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 isnotpossessed 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 area.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 generallyexpensed?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'-digitsb.Straight-linec.Units of productiond.Double-declining-balance27.The cost of an intangible asset includes all of the followingexcepta.purchase price.b.legal fees.

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