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Home
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Intangible Asset
Intangible Asset MCQs
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Which of the following is not considered to be an intangible asset?
Goods on consignment.
Patents.
Copyrights.
Trademarks.
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A recognized intangible asset is amortized over its useful life
Unless the pattern of consumption of the economic benefits of the asset is not reliably determinable.
If that life is determined to be finite.
Unless the precise length of that life is not known.
If that life is indefinite but not infinite.
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Hansen, Inc., purchased a patent at the beginning of Year 1 for $22,100 that was to be amortized over 17 years. On July 1 of Year 8, Hansen incurred ...
$2,500
$1,971
$1,900
$1,300
?
Which of the following costs associated with an internally developed patent should be capitalized? Research and Patent Development Registration
No Yes
No No
Yes No
Yes Yes
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On July 1, Broadstreet Corporation acquired a patent on its new manufacturing process, which streamlines its production operation. The cost of the pat...
$15,300
$16,000
$16,150
$16,500
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Which of the following expenditures qualifies for asset capitalization?
Cost of materials used in prototype testing.
Costs of testing a prototype and modifying its design.
Salaries of engineering staff developing a new product.
Legal costs associated with obtaining a patent on a new product.
?
During the year just ended, Jase Co. incurred research and development costs of $136,000 in its laboratories relating to a patent that was granted on ...
$32,300
$33,150
$161,500
$165,000
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A purchased patent has a remaining legal life of 15 years. It should be
Expensed in the year of acquisition
Amortized over 15 years regardless of its useful life.
Amortized over its useful life if less than 15 years
Amortized over 40 years.
?
Under IFRS, an entity that acquires an intangible asset may use the revaluation model for subsequent measurement only if
The useful life of the intangible asset can be reliably determined.
An active market exists for the intangible asset.
The cost of the intangible asset can be measured reliably.
The intangible asset is a monetary asset.
?
Legal fees incurred by a company in defending its patent rights should be capitalized when the outcome of litigation is Successful Unsuccessful
Yes Yes
Yes No
No No
No Yes
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Gray Co. was granted a patent on January 2, Year 5, and appropriately capitalized $45,000 of related costs. Gray was amortizing the patent over its e...
$15,000
$24,000
$27,000
$39,000
?
Which of the following assets, if any, acquired this year in an exchange transaction is(are) potentially amortizable? Goodwill Trademarks
No No
No Yes
Yes Yes
Yes No
?
Goodwill should be tested for value impairment at which of the following levels?
Each identifiable long-term asset
Each reporting unit.
Each acquisition unit.
Entire business as a whole.
?
A company should recognize goodwill in its balance sheet at which of the following points?
Costs have been incurred in the development of goodwill.
Goodwill has been created in the purchase of a business
The company expects a future benefit from the creation of goodwill.
The fair market value of the company’s assets exceeds the book value of the company’s assets.
?
On December 31, year 3, Byte Co. had capitalized software costs of $600,000 with an economic life of four years. Sales for year 4 were 10% of expect...
$432,000
$450,000
$480,000
$540,000
?
On January 2, year 4, Judd Co. bought a trademark from Krug Co. for $500,000. Judd retained an independent consultant, who estimated the trademarkâ€...
$ 7,600
$ 9,500
$10,000
$12,500
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On January 2, year 4, Paye Co. purchased Shef Co. at a cost that resulted in recognition of goodwill of $200,000. During the first quarter of year 4...
$180,000
$200,000
$252,000
$280,000
?
Northern Airline purchased airline gate rights at Newark International Airport for $2,000,000 with a legal life of five years. However, Northern has...
5 years.
15 years.
40 years.
The rights should not be amortized.
?
On January 2, year 1, Lava, Inc. purchased a patent for a new consumer product for $90,000. At the time of purchase, the patent was valid for fiftee...
$ 9,000
$54,000
$63,000
$72,000
?
What does ASC Topic 350 require with respect to accounting for goodwill?
Goodwill should be amortized over a five-year period.
Goodwill should be amortized over its expected useful life.
Goodwill should be recorded and never adjusted.
Goodwill should be recorded and periodically evaluated for impairment.
?
Which of the following statements concerning patents is correct?
Legal costs incurred to successfully defend an internally developed patent should be capitalized and amortized over the patent’s remaining economic life.
Legal fees and other direct costs incurred in registering a patent should be capitalized and amortized on a straight-line basis over a five-year period.
Research and development contract services purchased from others and used to develop a patented manufacturing process should be capitalized and amortized over the patent’s economic life.
Research and development costs incurred to develop a patented item should be capitalized and amortized on a straight-line basis over seventeen years.
?
Under ASC Topic 350, goodwill should be tested periodically for impairment
For the entity as a whole.
At the subsidiary level.
At the industry segment level.
At the operating segment level or one level below.
?
Sloan Corporation is performing its annual test of the impairment of goodwill for its Financing reporting unit. It has determined that the fair valu...
Impairment is not indicated and no additional analysis is necessary.
Goodwill should be written down as impaired.
The assets and liabilities should be valued to determine if there has been an impairment of goodwill.
Goodwill should be retested at the entity level.
?
Wilson Corporation is performing the test of impairment of its Technology reporting unit at 9/30/Y4. In the first step of the process, Wilson has va...
Record an impairment loss of $100,000.
Record no impairment loss.
Value goodwill individually.
Perform step two of the test of impairment.
?
Under IFRS, what valuation methods are used for intangible assets?
The cost model or the fair value model.
The cost model or the revaluation model.
The cost model or the fair value through profit or loss model.
The revaluation model or the fair value model.
?
Under IFRS, an entity that acquires an intangible asset may use the revaluation model for subsequent measurement only if
The useful life of the intangible asset can be reliably determined.
An active market exists for the intangible asset.
The cost of the intangible asset can be measured reliably.
The intangible asset is a monetary asset.
?
Under IFRS, which of the following is a criterion that must be met in order for an item to be recognized as an intangible asset other than goodwill?...
The item’s fair value can be measured reliably.
The item is part of the entity’s activities aimed at gaining new scientific or technical knowledge.
The item is expected to be used in the production or supply of goods or services.
The item is identifiable and lacks physical substance.
?
Under IFRS, intangible assets with indefinite lives are tested for impairment
Quarterly at the quarterly reporting date.
Annually at the annual reporting date.
Biannually at the reporting date.
There are no guidelines defining when intangible assets are tested for impairment.
?
Under IFRS, an intangible asset is considered to be impaired if its carrying value is greater than its recoverable amount. The recoverable amount is...
Its historical cost.
Its net selling price.
The greater of its net selling price or its value in use.
Its replacement cost
?
Right granted to use a trademark or tradename within a geographic area.
Trademark
Patents
Copyright.
Franchise.
?
Exclusive right to display a word, symbol, or emblem.
Trademark
Patents
Copyright.
Franchise.
?
Point in time to begin capitalization of software development costs.
Software development costs
Capital budgeting
Technological feasibility
Maintenance costs during the first 30 days of use.
?
The allocation of cost for intangible assets.
Fixed asset turnover ratio
Depreciation
Average accumulated expenditures
Amortization
?
Exclusive right of protection given to the creator of a published work.
Trademark
Patents
Copyright.
Franchise.
?
Long-term assets that generally represent various types of rights.
Land
Asset retirement obligations
Intangible assets
Copyright
?
Consideration given less fair value of net identifiable assets.
Loss
Fixed asset turnover ratio
Asset retirement obligations
Goodwill
?
The cost allocation of equipment.
Fixed asset turnover ratio
Depreciation
Depletion
Amortization
?
The allocation of cost of natural resources.
Fixed asset turnover ratio
Depreciation
Depletion
Amortization
?
Protects against infringements on manufactured products.
Patent.
Copyright.
Trademark.
Franchise.
?
An exclusive right to display a word, slogan, symbol or emblem.
Trademark
Patents
Copyright.
Franchise.
?
An exclusive 20-year right to manufacture a product or use a process is a:
Patent.
Copyright.
Trademark.
Franchise.
?
The exclusive right to benefit from a creative work, such as a film, is a:
Patent.
Copyright.
Trademark.
Franchise.
?
The exclusive right to display a symbol of product identification is a:
Patent.
Copyright.
Trademark.
Franchise.
?
FIFA Footballs acquired a patent in 2015 at a cost of $150 million and amortizes the patent on a straight-line basis. During 2018 management decided t...
A patent balance of $150 million.
A patent balance of $102 million.
Patent amortization expense of $15 million.
Patent amortization expense of $7.5 million.
?
Hepburn Company bought a copyright for $90,000 on January 1, 2015, at which time the copyright had an estimated useful life of 15 years. On January 5,...
$14,400.
$7,200.
$8,000.
$18,000.
?
Goosen Company bought a copyright for $90,000 on January 1, 2015, at which time the copyright had an estimated useful life of 15 years. On January 5, ...
$0.
$12,000.
$8,000.
$14,400.
?
Washburn Co. spent $10 million to purchase a new patented technology, debiting an intangible asset and crediting cash. Washburn uses SYD depreciation ...
Washburn is not required to make any accounting adjustments.
Washburn is required to adjust a change in accounting estimate prospectively.
Washburn has made a change in accounting principle, requiring retrospective adjustment.
Washburn needs to correct an accounting error.
?
A corporation purchased a patent at the beginning of Year 1 for $22,100 that was to be amortized over 17 years. On July 1 of Year 8, the corporation ...
$2,500
$1,971
$1,900
$1,300
