FAR THEORY - INTANGIBLE ASSETS

Question 1

The Accumulated Depletion account is

a. reported on the income statement as other expense
b. an expense account
c. an intangible asset account
d. reported on the balance sheet as a deduction from the cost of the mineral deposit

Answer 1

d. reported on the balance sheet as a deduction from the cost of the mineral deposit

Question 2

The process of transferring the cost of metal ores and other minerals removed from the earth to an
expense account is called

a. amortization
b. deferral
c. depreciation
d. depletion

Answer 2

d. depletion

Question 3

Expenditures for research and development are generally recorded as

a. assets and amortized over 40 years
b. current operating expenses
c. current assets
d. assets and amortized over their estimated useful life

Answer 3

b. current operating expenses

Question 4

The term applied to the amount of cost to transfer to expense resulting from a decline in the utility of
intangible assets is

a. depletion
b. amortization
c. allocation
d. depreciation

Answer 4

b. amortization

Question 5

Which intangible assets are amortized over their useful life?

a. goodwill
b. patents
c. all of the answers are correct
d. trademarks

Answer 5

b. patents

Question 6

The exclusive right to use a certain name or symbol is called a

a. copyright
b. franchise
c. patent
d. trademark

Answer 6

d. trademark

Question 7

Fixed assets are ordinarily presented in the balance sheet

a. at current market values
b. in a separate section along with intangible
assets
c. at replacement costs
d. at cost less accumulated depreciation

Answer 7

d. at cost less accumulated depreciation