Which characteristic is not possessed by intangible assets Answer

Which characteristic is not possessed by intangible assets Answer

Which characteristic is not possessed by intangible assets Answer

Which characteristic is not possessed by intangible assets Answer

1. (TCO C) Which characteristic is not possessed by intangible assets? (Points: 5)
Physical existence.
Short-lived.
Result in future benefits.
Expensed over current and/or future years.

2. (TCO C) The cost of purchasing patent rights for a product that might otherwise have seriously competed with one of the purchaser’s patented products should be (Points: 5)
charged off in the current period.
amortized over the legal life of the purchased patent.
added to factory overhead and allocated to production of the purchaser’s product.
amortized over the remaining estimated life of the original patent covering the product whose market would have been impaired by competition from the newly patented product.

3. (TCO C) Intangible assets are reported on the balance sheet (Points: 5)
with an accumulated depreciation account.
in the property, plant, and equipment section.
separately from other assets.
none of the above.

4. (TCO D) Which of the following is true about accounts payable?
(1.) Accounts payable should not be reported at their present value.
(2.) When accounts payable are recorded at the net amount, a Purchase Discounts account will be used.
(3.) When accounts payable are recorded at the gross amount, a Purchase Discounts Lost account will be used. (Points: 5)
1
2
3
Both 2 and 3 are true.

5. (TCO D) A contingency can be accrued when (Points: 5)
it is certain that funds are available to settle the disputed amount.
an asset may have been impaired.
the amount of the loss can be reasonably estimated, and it is probable that an asset has been impaired or a liability incurred.
it is probable that an asset has been impaired or a liability incurred, even though the amount of the loss cannot be reasonably estimated.

6. (TCO D) An electronics store is running a promotion in which, for every video game purchased, the customer receives a coupon upon checkout to purchase a second game at a 50% discount. The coupons expire in one year. The store normally recognizes a gross profit margin of 40% of the selling price on video games. How would the store account for a purchase using the discount coupon? (Points: 5)
The reduction in sales price attributed to the coupon is recognized as premium expense.
The difference between the cost of the video game and the cash received is recognized as premium expense.
Premium expense is not recognized.
The difference between the cost of the video game and the selling price prior to the coupon is recognized as premium expense.

7. (TCO D) An example of an item which is not a liability is (Points: 5)
dividends payable in stock.
advances from customers on contracts.
accrued estimated warranty costs.
the portion of long-term debt due within one year.

8. (TCO D) On January 1, 2010, Huff Co. sold $1,000,000 of its 10% bonds for $885,296 to yield 12%. Interest is payable semiannually on January 1 and July 1. What amount should Huff report as interest expense for the six months ended June 30, 2010? (Points: 5)
$44,266
$50,000
$53,118
$60,000

$885,296 × .06 = $53,118

9. (TCO E) Stockholders’ equity is generally classified into two major categories: (Points: 5)
contributed capital and appropriated capital.
appropriated capital and retained earnings.
retained earnings and unappropriated capital.
earned capital and contributed capital.

10. (TCO F) A mining company declared a liquidating dividend. The journal entry to record the declaration must include a debit to (Points: 5)
Retained Earnings.
a paid-in capital account.
Accumulated Depletion.
Accumulated Depreciation.

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Intangible