1. The cost of an intangible asset with an indefinite life should

A) be amortized over 20 years.

B) be amortized over the life of the creator plus 70 years.

C) not be amortized.

D) none of the above.

2. Cost allocation of an intangible asset is referred to as

A) amortization.

B) depreciation.

C) accretion.

D) capitalization.

3. If a company incurs legal costs in successfully defending its patent, these costs are recorded by debiting

A) Legal Expense.

B) the Intangible Loss account.

C) the Patent account.

D) a revenue expenditure account.

4. Copyrights are granted by the federal government

A) for the life of the creator or 70 years, whichever is longer.

B) for the life of the creator plus 70 years.

C) for the life of the creator or 70 years, whichever is shorter.

D) and therefore cannot be amortized.

5. In recording the acquisition cost of an entire business

A) goodwill is recorded as the excess of cost over the fair value of identifiable net assets.

B) assets are recorded at the seller's book values.

C) goodwill, if it exists, is never recorded.

D) goodwill is recorded as the excess of cost over the book value of identifiable net assets.

6. Goodwill

A) may be expensed upon purchase if desired.

B) can be sold by itself to another company.

C) can be purchased and charged directly to stockholders' equity.

D) is only recorded when the purchase of an entire business occurs.

7. Trademarks are generally shown on the balance sheet under

A) Intangibles.

B) Investments.

C) Property, Plant, and Equipment.

D) Current Assets.

8. Which of the following is not an intangible asset that is reported on the balance sheet?

A) Goodwill

B) Trademarks

C) Employees

D) Copyrights

9. Given the following account balances at year end, compute the total intangible assets on the balance sheet of Anisha Enterprises.

Cash $1,500,000

Accounts Receivable 4,000,000

Trademarks 1,000,000

Goodwill 4,500,000

Research & Development Costs 2,000,000

A) $11,500,000

B) $7,500,000

C) $5,500,000

D) $9,500,000