Which of the following statements is false regarding intangible assets? O a. Intangibles with an indefinite life are not subject to amortization. O b. Purchased intangibles are recorded as assets for the amount paid to acquire them. Oc. Internally developed intangibles should be recorded as assets for the amount spent to develop them. O d. Intangibles with a finite life should be amortized on a straight-line basis.

Which of the following statements is false regarding intangible assets? O a. Intangibles with an indefinite life are not subject to amortization. O b. Purchased intangibles are recorded as assets for the amount paid to acquire them. Oc. Internally developed intangibles should be recorded as assets for the amount spent to develop them. O d. Intangibles with a finite life should be amortized on a straight-line basis.

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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TRUE OR FALSE The term used to describe the mechanical process of allocating the cost of an intangible asset to expense over the shorter of the legal life or estimated useful life is called amortization.
Intangible assets on the balance sheet are subject to: Depreciation Amortization O None of the Above
Intangible assets are amortized when: There is no more depreciation available to take. It has a finite life. It has an infinite life. The value has been impaired.
Which of the following methods is used to amortize intangible assets over their useful lives? a. a declining balance methodb. straight linec. annual review for impairmentd. intangible assets are not amortized
Which of the following statements is FALSE? Some intangible assets are not required to be amortized. Research and development expenditures are expensed as incurred because of the uncertainty regarding their future cash flows. Amortization expense is generally recorded with a credit to the Accumulated Amortization account. Internally generated goodwill is not capitalized in the accounts.
E4
Research and development is an internally developed intangible asset that should be: capitalized and amortized over its finite life. capitalized and reviewed for impairment over its indefinite life. expensed as incurred. treated differently from any of these choices.
Which of the following statements is false? A.For a self constructed asset, capitalized interest should never exceed actual interest cost. B.A loss on exchange will always be recognized regardless of commercial substance. C.The cost to build an addition to an existing building should be expensed immediately. D.If a long-lived asset is acquired and will be paid over a number of years, the time value of money should be considered.