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Flashcards in Deck 3 Deck (15):
1

Change from FIFO to LIFO (type of change and method)

Change in accounting principle but it is a prospective change

2

"Reporting sufficiency" test for segment reporting

75% of total external sales only

3

Patents will be amortized and capitalized over the lesser of:

The economic life or legal life

4

Goodwill is not:

Amortizable but can be capitalized

5

How is goodwill calculated under IFRS?

The total carrying amount - recoverable amount = impairment loss

6

Goodwill is only capitalized when:

incurred in the purchase of another entity

7

When service contracts are sold, the entire proceeds are reported as:

Deferred revenue

8

Under US GAAP, research and development includes:

Costs incurred prior to technological feasibility for developed software that is to be sold (Can not be for internal use or marketing)

9

Legal fees and other costs associated with registering a patent are:

Capitalized (R&D is expensed)

10

Research and development costs do not include:

Routine periodic design changes, marketing research, quality control testing

11

When there is an unlimited right of return on a sale of goods, what happens?

Most likely nothing will be recorded as sales revenue

12

Software developed internally is:

Expensed under GAAP

13

Royalty expense is the larger of:

Minimum royalties or 10% of book sales

14

Capitalize or expense patents?

Capitalize successful patents; expense unsuccessful patents

15

Matching principle

Match expenses against revenues