1.
Limited-life intangibles should be amortized over the greater of their useful lives or their legal lives.
A. True
B. False


2.
The total cost of a trademark or trade name may be expensed rather than capitalized.
A. True
B. False


3.
The residual value of an intangible asset should be assumed to be zero unless its useful life is less than its economic life.
A. True
B. False


4.
Annual payments made under a franchise agreement should be capitalized.
A. True
B. False


5.
Copyrights are renewable.
A. True
B. False


6.
Intangible assets are normally classified as long-term assets.
A. True
B. False


7.
If a company acquires intangibles for stock or in exchange for other assets, the cost of the intangible is the fair value of the consideration given or the fair value of the intangible received, whichever is more clearly evident.
A. True
B. False


8.
The impairment test for indefinite-life intangibles differs from the test for limited-life intangibles.
A. True
B. False


9.
Trademarks and trade names are examples of contract-related intangible assets.
A. True
B. False


10.
A company debits all legal fees and other costs incurred in successfully defending a patent suit to Legal Expense.
A. True
B. False


11.
There are no significant differences between U.S. GAAP and iGAAP with respect to accounting treatments for intangibles.
A. True
B. False


12.
Which of the following is not a characteristic of intangible assets?
A.
They are classified as long-term assets.
B.
They lack physical existence.
C.
They are not financial instruments.
D.
All of the above are correct.


13.
Which of the following is not a factor to be considered in determining a limited-life intangible asset's useful life?
A.
Any legal provisions that may limit the useful life.
B.
The expected useful life of any related asset.
C.
The effects of obsolescence.
D.
All of the above are correct.


14.
Which of the following is not an example of a limited-life intangible asset?
A.
Patent.
B.
Franchise.
C.
Goodwill.
D.
Copyright.


15.
Which of the following is not one of the major categories of intangibles?
A.
Contract-related.
B.
Financing-related.
C.
Artistic-related.
D.
Marketing-related.


16.
Which of the following would not be amortized?
A.
Goodwill.
B.
Patent.
C.
Copyright.
D.
Customer list.


17.
Which of the following costs would not be included in the cost of a patent?
A.
Filing fees.
B.
Research and development costs related to product development.
C.
Attorney fees in a successful legal suit.
D.
Purchase price.


18.
For indefinite-life intangibles other than goodwill, an impairment test should be conducted at least:
A.
quarterly.
B.
monthly.
C.
annually.
D.
once during its useful life.


19.
The amount of an impairment loss is equal to the difference between the:
A.
present value of the expected future net cash flows and the carrying value.
B.
cost and the accumulated amortization.
C.
carrying value and the accumulated amortization.
D.
future net cash flows and the carrying value.


20.
The impairment rule for goodwill involves how many steps?
A.
1
B.
2
C.
3
D.
4


21.
Which of the following research and development costs may be capitalized?
A.
Contract services.
B.
Personnel.
C.
Indirect costs.
D.
Research and development equipment to be used on current and future projects.



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