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Multiple Choice Identify the choice that best completes the statement or answers the question. 

1. Which of the following items is not  an intangible asset?a. Patent

 b. Landc. Copyrightd. Trademark

ANSWER: BEasy

POINTS: 0 / 1REF:  page 269 

2. Intangible assets are usually divided into which three categories?a. Patents, trademarks and copyrights

 b. Research and development, goodwill and other intangible assetsc. Purchased intangible assets, internally generated intangible assets and goodwilld. Software, goodwill and other intangible assets

ANSWER: BEasy

POINTS: 0 / 1REF:  page 272 

3. In the consolidated financial statements, goodwill represents any excess of the cost of the acquisition over the acquirer’s interest in the fair value of the identifiable assets andliabilities acquired as of the date of the exchange transaction.a. True

 b. False

ANSWER: A

EasyPOINTS: 0 / 1REF:  pages 272, 273 

4. Which of the following statements is false?a. Organization costs are the costs incurred during the process of establishing or 

incorporating a business. b. Organization costs are also called incorporation costs or set-up costs.c. If recorded as intangible assets, organization costs are not amortized.d. Organization costs include incorporation fees, legal fees, underwriting fees,

accounting fees, and promotional fees.

ANSWER: CEasy

POINTS: 0 / 1REF:  page 274

 

Name: Score: 0 / 10 points (0%)

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 5. The recognition of intangible assets allows their amortization over the period during

which economic benefits are derived. Which principle is put into practice in thisstatement?a. Going concern principle

 b. Matching principlec. Prudence principled. Accrual principle

ANSWER: BEasy

POINTS: 0 / 1REF:  page 277 

6. What is the process called, where costs of an intangible asset are allocated over itsuseful life?a. Depletion

 b. Impairmentc. Depreciation

d. Amortization

ANSWER: DEasy

POINTS: 0 / 1REF:  page 279 

7. Which of the following methods is not  used to report changes in value of intangibleassets?a. Capitalization

 b. Impairmentc. Revaluationd. Amortization

ANSWER: AEasy

POINTS: 0 / 1REF:  page 279 

8. Which of the following statements is correct?a. Amortization and impairment are exclusive concepts.

 b. Impairment is specific to intangible assets.c. Impairment is a systematic allocation of the cost of intangible assets.d. Countries that have not officially adopted a rule on impairment generally have

some form of an equivalent concept.

ANSWER: DEasy

POINTS: 0 / 1REF:  pages 279, 280 

9. Many users of financial statements see capitalization of R&D as a grave violation of

which principle?a. Prudence principle

 b. Going concern principlec. Matching principled. Accrual principle

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ANSWER: AEasy

POINTS: 0 / 1REF:  page 284 

10. In what way(s) can costs be reported in the accounting treatment of internally developedsoftware for use by the developing firm itself?

a. Expensed as a part of purchases of merchandise or of cost of goods sold. b. Only certain costs, such as costs of design, coding, testing, documentation,

training materials, are capitalized as intangible asset.c. Expensed.d. Totally capitalized as intangible asset if amount is material.

ANSWER: BModerate

POINTS: 0 / 1REF:  page 288 

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