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

Name: ACC 304 Week 11 Final Exam: Intangible Assets and Related Accounting Concepts
Brand: University of Phoenix
Price: 2 USD
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Author: Amelia Ward

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

Amelia Ward

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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

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

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 assets in a manner similar to accumulated
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.

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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University

University of Phoenix

Subject

Accounting

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

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