Generally Accepted Accounting Principles
1. Question :
Student Answer:
(TCO C) The cost of an intangible asset includes all of the following except purchase price. legal fees. other incidental expenses.
Instructor
Explanation:
Points Received:
All of these are included.
Chapter 12
5 of 5
Comments:
Question 2.Question :
Student Answer:
(TCO C) Wriglee, Inc. went to court this year and successfully defended its patent from infringement by a competitor. The cost of this defense should be charged to patents, and amortized over the legal life of the patent. legal fees, and amortized over 5 years or less. expenses of the period.
Instructor
Explanation:
Points Received:
patents, and amortized over the remaining useful life of the patent.
Chapter 12
5 of 5
Comments:
Question 3.Question …show more content…
How should goodwill, properly recorded on the books, be written off in accordance with generally accepted accounting principles?
Goodwill is recorded in the accounts only under the circumstances that is is acquired through a purchase of another business or combination of businesses. According to Generally Accepted
Accounting Principle under these circumstances where goodwill is acquired through a purchase by another business that it is recognized as having indefinite life and should not be amortized but should be tested for impairment on at least an annual basis.
Chapter 12, Goodwill is recorded only when it is acquired through a business combination. Goodwill acquired in a business combination is considered to have an indefinite life and therefore should not be amortized, but should be tested for impairment on at least an annual basis.
15 of 15
Comments:
Question 3.Question :
(TCO D) Irving Music Shop gives its customers coupons redeemable for a poster plus a Dixie Chicks CD. One coupon is issued for each dollar of sales. On the surrender of 100 coupons and $5.00 cash, the poster and
CD are given to the customer. It is estimated that 80% of the coupons
Student Answer:
(TCO C) The cost of an intangible asset includes all of the following except purchase price. legal fees. other incidental expenses.
Instructor
Explanation:
Points Received:
All of these are included.
Chapter 12
5 of 5
Comments:
Question 2.Question :
Student Answer:
(TCO C) Wriglee, Inc. went to court this year and successfully defended its patent from infringement by a competitor. The cost of this defense should be charged to patents, and amortized over the legal life of the patent. legal fees, and amortized over 5 years or less. expenses of the period.
Instructor
Explanation:
Points Received:
patents, and amortized over the remaining useful life of the patent.
Chapter 12
5 of 5
Comments:
Question 3.Question …show more content…
How should goodwill, properly recorded on the books, be written off in accordance with generally accepted accounting principles?
Goodwill is recorded in the accounts only under the circumstances that is is acquired through a purchase of another business or combination of businesses. According to Generally Accepted
Accounting Principle under these circumstances where goodwill is acquired through a purchase by another business that it is recognized as having indefinite life and should not be amortized but should be tested for impairment on at least an annual basis.
Chapter 12, Goodwill is recorded only when it is acquired through a business combination. Goodwill acquired in a business combination is considered to have an indefinite life and therefore should not be amortized, but should be tested for impairment on at least an annual basis.
15 of 15
Comments:
Question 3.Question :
(TCO D) Irving Music Shop gives its customers coupons redeemable for a poster plus a Dixie Chicks CD. One coupon is issued for each dollar of sales. On the surrender of 100 coupons and $5.00 cash, the poster and
CD are given to the customer. It is estimated that 80% of the coupons