FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 12: Intangibles

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 61

Multiple Choice

Review LaterAdd Note

Review Later

Based on GAAP, most software development costs are likely to be

A) expensed as R&D costs.
B) allocated to inventory and expensed to cost of goods sold when the software is sold.
C) capitalized and amortized over a 40-year period.
D) capitalized and amortized over a relatively short period, such as five years.

Correct Answer

verified

Show Answer

Question 62

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following is not a required disclosure regarding intangible assets that are amortized for each period a company presents a balance sheet?

A) the total cost
B) the accumulated amortization
C) the amortization expense
D) the estimated amortization expense for the next ten years

Correct Answer

verified

Show Answer

Question 63

Multiple Choice

Review LaterAdd Note

For financial reporting purposes, GAAP requires organization costs to be

Which of the following costs should always be expensed as incurred?

The cost of a copyright should

Purchased intangible assets are generally expensed at their acquisition costs because the future economic benefits associate with them are difficult to measure.

Trademarks are considered to have an indefinite life and are therefore not subject to amortization.

Which of the following expenditures cannot be included in R&D costs?

Consider the following information from a company's records for the current year: Required: Compute the amount of R&D expense for the current year. The company normally uses straight-line depreciation for plant assets.

Grier purchased Walters Company several years ago. Walters become a reporting unit of Griers. At the end of 2014, Grier had a net book value of $1.6 million which includes $400,000 of goodwill. A goodwill impairment test is done as part of the year end closing process. Grier estimates the fair value of Walters to be $1.4 million. The fair value of Walters identifiable net assets, excluding goodwill, is $1.3 million. Required: 1.) Determine if goodwill is impaired 2.) Prepare the journal entry required for the impairment if necessary.

Which statement regarding goodwill is true?

As computer software to be sold, leased, or otherwise marketed is developed, software production costs should be accounted for according to which of the following sets?

GAAP requires that research and development costs must be

Development costs related to computer software that is to be sold, leased, or otherwise marketed should be accounted for in which of the following ways?

Costs associated with various intangibles of a company may either be expensed when incurred or capitalized and amortized. Such costs might be recorded in any of the following ways: a. charged to the patent account and amortized b. charged to the franchise account and amortized c. charged to other appropriate asset accounts and amortized or depreciated d. charged to expense when incurred Required: Indicate how each of the following costs should be recorded by placing the appropriate letter a-d) in the space provided. ____ 1. initial fee to acquire a franchise ____ 2. design, construction, and testing of preproduction prototypes and models ____ 3. legal costs incurred in connection with a successful patent application ____ 4. laboratory research aimed at discovery of new knowledge ____ 5. cost of purchased equipment that will be used in a series of R&D projects over a ten-year period ____ 6. legal costs of the initial incorporation of a business ____ 7. cost of a long-term lease of land containing mineral deposits ____ 8. annual service fee paid to the franchiser's headquarters for administrative services rendered to the franchisee

GAAP requires companies to disclose any costs of research and development acquired and written off as well as where the information can be found on the income statement.

________ cannot be separated from the entity and sold, transferred, licensed, rented, or exchanged.

Which of the following sets represents a false relationship regarding the accounting for the cost of intangibles according to GAAP?

Development costs related to computer software that is to be sold, leased, or otherwise marketed should be accounted for in which of the following ways?

Indicate how each of the following costs should be recorded by placing the appropriate letter (a-d) in the space provided.