A purchased patent that has a remaining legal lifeof 15 years should beAmortized over 20 yearsO Amortized over its useful life if less than 15 years.O Amortized over 15 years regardless of the useful life.O Expensed in the year of acquisitionGood willshould *O Be amortized against retained earnings.Not be amortized but tested for impairment at least annually.Be amortized systematically over the useful life.O Be written off against income.Which is incorrect concerning the criterion of control bythe enterprise of the intangible asset? *Market and technical knowledge may give rise to future economic benefits which canbe controlled by the enterprise if the knowledge is protected by legal rights such ascopyright.The capacity of the enterprise to control the economic benefits from an intangibleasset would normally stem from legal rights that are enforceable in a court of law.The skill of employees arising out of the benefits of training costs can be recognizedas intangible asset.An enterprise controls an asset if the enterprise has the power to obtain the futureeconomic benefits flowing from the underlying resource and also can restrict theaccess of others to those benefits.Intangible assets areclassified as *O Specifically identifiable and goodwill typeO Amortizable and unamortizableLimited life and indefinite lifeO Legally restricted and goodwill typeKO O O OОО О

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A purchased patent that has a remaining legal life of 15 years should be * Amortized over 20 years Amortized over its useful life if less than 15 years. Amortized over 15 years regardless of the useful life. O Expensed in the year of acquisition

A purchased patent that has a remaining legal life of 15 years should be * Amortized over 20 years Amortized over its useful life if less than 15 years. Amortized over 15 years regardless of the useful life. O Expensed in the year of acquisition

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A purchased patent that has a remaining legal life
of 15 years should be
Amortized over 20 years
O Amortized over its useful life if less than 15 years.
O Amortized over 15 years regardless of the useful life.
O Expensed in the year of acquisition
Good will
should *
O Be amortized against retained earnings.
Not be amortized but tested for impairment at least annually.
Be amortized systematically over the useful life.
O Be written off against income.
Which is incorrect concerning the criterion of control by
the enterprise of the intangible asset? *
Market and technical knowledge may give rise to future economic benefits which can
be controlled by the enterprise if the knowledge is protected by legal rights such as
copyright.
The capacity of the enterprise to control the economic benefits from an intangible
asset would normally stem from legal rights that are enforceable in a court of law.
The skill of employees arising out of the benefits of training costs can be recognized
as intangible asset.
An enterprise controls an asset if the enterprise has the power to obtain the future
economic benefits flowing from the underlying resource and also can restrict the
access of others to those benefits.
Intangible assets are
classified as *
O Specifically identifiable and goodwill type
O Amortizable and unamortizable
Limited life and indefinite life
O Legally restricted and goodwill type
K
O O O O
ОО О

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