1) When the fair value of the assets acquired in a business purchase exceed the purchase price, a bargain purchase arises. When this happens, GAAP requires that the difference be allocated:
a) To a gain account b) to all periods beneficiated on an equitable basis c) to reduce proportionately the values assigned to certain noncurrent assets d)to reduce proportionately the values assigned to both current and noncurrent assets.
2) The amortization of goodwill:
a) is dependent upon the number of years a company expects to use the benefits it provides.
b) does not happen as it is deem to have an indefinitive life.
c) represents as acceptable an accounting practice as does the immediate write-off method.
d) should be computed using the staright-line method unless another method is deemed more appropriate.
3) One factor that is not considered in determining the useful life of an intangible asset is:
a) legal life b)expected actions of competitors c)salvage value d)provisions for renewal or extensions