Intangibles, Goodwill, R & D

1. Limited - life intangibles are reported at their
replacement cost
carrying amount unless impaired
acquisition cost
liquidation value

2.the major problem of accounting for intangibles is determining
fair market value
salvage value
useful life

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

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

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

Solution Summary

Solution includes answers to several multiple choice questions. Topics include Limited life intangibles, accounting for intangibles, accounting treatment of goodwill and research and development cost.