Question 1. Limited - life intangibles are reported at their
- replacement cost
- carrying amount unless impaired
- acquisition cost
- liquidation value
Question 2. The major problem of accounting for intangibles is determining
- fair market value
- salvage value
- separability
- useful life
Question 3. The intangible asset goodwill may be
- capitalied only when purchased
- capitalized either when purchased or created internally
- capitalized only when created internally
- written off directly to retained earnings
Question 4. Purchased goodwill should
- be written off as soon as possible against retained earnings
- be written off as soon as possible as an extraordinary item
- be written off by systematic charges as a regular operating expense over the period benefited
- not be amortized
Question 5. Which of the following principles BEST describes the current method of accounting for research and development costs?
- associating cause and effect
- systematic and rational allocation
- income tax minimization
- immediate recognition as an expense