Exam-3 - Chapters 7-9 Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or question. ers the 1) Which of the following would be recorded as land improvements? A) Title insurance. C) Property taxes B) Adding a parking lot. D) Real estate commissions. 2) Bad Brads BBQ purchased a piece of equipment by paying $5,000 cash. They also incurred a shipping cost of $400 to get the equipment to its factory. The fair value of this equipment is $7,000. For what amount should Bad Brads BBQ record the equipment? A) $7,000. B) $5,000. C) $7,400. D) $5,400 3) Productive assets that are physically used up or depleted are: A) Land improvements. C) Natural resources B) Equipment. D) Land. 4) The legal life of a patent is: A) Twenty years. C) Life of the inventor plus fifty years. B) Forty years. D) Indefinite. 5) Research and development costs should be: A) Expensed in the period incurred. B) Deferred pending determination of success. C) Expensed in the period they are determined to be unsuccessful. D) Expensed if unsuccessful, capitalized if successful. 6) Goodwill is: A) Recorded when created internally through advertising expense. B) The value of a business as a whole, over and above the value of its net identifiable assets. C) Only recorded by the seller of a business. D) Amortized over the greater of its estimated life or forty years. 7) Which of the following subsequent expenditures would be capitalized? A) Costs that increase the service life of an asset. B) Routine maintenance. C) Ordinary repair and routine maintenance. D) Ordinary repair. 8) Which of the following is not a current liability? A) Sales tax payable. C) Current portion of long-term debt. B) Accounts payable. D) A note payable due in 2 years