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    Intangibles, Goodwill, R & D

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    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
    separability
    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

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    Solution Preview

    Please see attached document.

    Deborah Larsen
    OTA 106195

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

    Limited-life intangibles are amortized over their useful lives. Amortizable base is equal to cost less residual value.

    (1) Residual value is assumed to be zero, unless

    (2) The intangible has value to another entity at the end of its useful life.

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

    Amortization enables companies to match the cost of intangible assets over the period deemed to benefit from their acquisition. Main ...

    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.

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