Quiz 1

Question 1

All research phase and development phase costs are expensed as incurred

Answer 1

False

Question 2

Research phase costs are capitalized as an intangible asset once the project has economic viability

Answer 2

False. Capitalize only development, when there is economic viability

Question 3

Some Intangible Assets are not required to be amortized every year

Answer 3

True. Finite and infinite

Question 4

Limited-Life intangibles are amortized by systematic charges to expense over their useful life

Answer 4

True You amortize the useful life

Question 5

The costs of acquiring a customer list from another company is recorded as an intangible asset

Answer 5

True

Question 6

The cost of purchased patents should be amortized over the remaining legal life of the patent

Answer 6

False. Legal Life or Useful Life, the smaller

Question 7

Internally generated goodwill can be capitalized in the accounts

Answer 7

False

Question 8

If the recoverable amount of an indefinite-life intangible other than the goodwill is less than its carrying value, an impairment loss must be recognized

Answer 8

True

Carrying Amount higher than Recovery Amount –> Impairment

Question 9

Under component depreciation, each of an item of property, plant and equipment whose cost is significant relative to the total cost of the asset must be depreciated separately

Answer 9

True

Question 10

A recovery of impairment for an intangible long-lived assets is limited to the carrying value that would have been reported had the impairment not ocurred

Answer 10

True