Chapter 10

Question 1

Operational assets that lack physical substance

Answer 1

Intangible Assets

Question 2

The cost of parking lots, driveways, and private roads and the costs of fences and lawn and garden sprinkler systems

Answer 2

Land Improvements

Question 3

The amounts paid to acquire the rights to explore for undiscovered natural resources or to extract proven natural resources

Answer 3

Acquisition Costs

Question 4

For natural resources, expenditures such as drilling a well, or excavating a mine, or any other costs of searching for natural resources

Answer 4

Exploration Costs

Question 5

For natural resources, costs incurred after the resource has been discovered but before production begins

Answer 5

Development Costs

Question 6

Costs to restore land or any other property to its original condition after extraction of the natural resources ends

Answer 6

Restoration Costs

Question 7

Obligations associated with the disposition of an operational asset

Answer 7

Asset Retirement Obligations (AROs)

Question 8

Adjusts the cash flows, not the discount rate, for the uncertainty or risk of those cash flows

Answer 8

Expected Cash Flows Approach

Question 9

The increase in as assets retirement obligation that accrues as an operating expense

Answer 9

Accretion Expense

Question 10

Exclusive right to manufacture a product or use a process

Answer 10

Patent

Question 11

Exclusive right of protection given to a creator of a published work

Answer 11

Copyright

Question 12

Exclusive right to display a word, slogan, symbol, or emblem that distinctively identifies a company, product, or service

Answer 12

Trademark

Question 13

The process of evaluating the purchase of operational assets

Answer 13

Capital Budgeting

Question 14

For interest capitalization, rates from specific construction loans to the extent of specific borrowings are used before using the average rate of other debt

Answer 14

Specific Interest Method

Question 15

For interest capital, weighted- average rate of all interest-bearing debt, including all construction loans

Answer 15

Weighted-average Interest Method

Question 16

One-time costs that incur when a company introduces a new product or service, or commences business in a new area or with a new costumer

Answer 16

Start-up Costs

Question 17

Established when a company as completed all planning, designing, coding, and testing activities that are necessary to establish that the product can be produced to meet its design specifications

Answer 17

Technological Feasibility

Question 18

Requires that explorations costs that are known not have resulted in the discovery or oil or gas can be included as expense in the period the expenditures are made

Answer 18

Successful Efforts Method

Question 19

Allows costs incurred in searching for oil and gas within a large geographical area to be capitalized as assets and expensed in the future when successful wells are found

Answer 19

Full-cost Method