For each of the following statements, circulate the correct answer.

$1-$Copyrights should be amortized over

a$.$ their legal life.

b$.$ the life of the creator plus fifty years.

c$.$ twenty years.

d$.$ their useful life or legal life, whichever is shorter

$2-$ Which of the following methods of amortization is normally used for intangible assets?

a$.$ Sum$-$of$-$the$-$years'$-$digits

b$.$ Straight$-$line

c$.$ Units of production

d$.$ Double$-$declining$-$balance

$3-$The cost of an intangible asset includes all of the following except

a$.$ purchase price.

b$.$ legal fees.

c$.$ other incidental expenses.

d$.$ all of these are included.

$4-$ Companies should evaluate indefinite life intangible assets at least annually for:

a$.$ recoverability.

b$.$ amortization.

c$.$ impairment.

d$.$ estimated useful life.

$5-$ When a patent is amortized, the credit is usually made to

a$.$ the Patents account.

b$.$ an Accumulated Amortization account.

c$.$ an Accumulated Depreciation account.

d$.$ an expense account.

$6-$ The intangible asset goodwill may be

a$.$ capitalized only when purchased.

b$.$ capitalized either when purchased or created internally.

c$.$ capitalized only when created internally.

d$.$ written off directly to retained earnings.

$4$

$7-$ Recovery of impairment is recognized for all the following except

a$.$ Patent held for sale.

b$.$ Patent held for use.

c$.$ Trademark.

d$.$ Goodwill.

$8-$ How should research and development costs be accounted for, according to an IASB Statement?

a$.$ Must be capitalized when incurred and then amortized over their estimated useful lives.

b$.$ Must be expensed in the period incurred.

c$.$ May be either capitalized or expensed when incurred, depending upon the materiality

of the amounts involved.

d$.$ Must be expensed in the period incurred unless it can be clearly demonstrated that the

expenditure will have alternative future uses or unless contractually reimbursable.

$9-$ Which of the following intangible assets should be shown as a separate item on the statement

of financial position?

a$.$ Goodwill

b$.$ Franchise

c$.$ Patent

d$.$ Trademark

$10-$ Which of the following should not be reported under the $$Other income and expense

section of the income statement?

a$.$ Goodwill impairment losses.

b$.$ Trade name amortization expense.

c$.$ Recovery of impairment losses

d$.$ All of these choices are correct.

$11-$ Contreras Corporation acquired a patent on May $1,2024.$ Contreras paid cash of $35,000$ to

the seller. Legal fees of $900$ were paid related to the acquisition. What amount should be

debited to the patent account?

a$.900$

b$.34,100$

c$.35,000$

d$.35,900$

$5$

$12-$ Jeff Corporation purchased a limited$-$life intangible asset for $150,000$ on May $1,2022.$ It has

a useful life of $10$ years. What total amount of amortization expense should have been

recorded on the intangible asset by December $31,2024?$

a$.-0-$

b$.30,000$

c$.40,000$

d$.45,000$

$13-$ On January $1,2022,$ Bingham Inc. purchased a patent with a cost $2,320,000,$ a useful life of

$5$ years. The company uses straight$-$line depreciation. At December $31,2023,$ the company

determines that impairment indicators are present. The fair value less costs to sell the patent is

estimated to be $1,080,000.$ The patent's value$-$in$-$use is estimated to be $1,130,000.$ The asset's

remaining useful life is estimated to be $2$ years.

Bingham's $2023$ income statement will report Loss on Impairment of

a$.0.$

b$.262,000.$

c$.312,000.$

d$.1,190,000.$

The company's $2024$ income statement will report amortization expense for the patent of

a$.377,000.$

b$.464,000.$

c$.565,000.$

d$.1,190,000.$

$14-$ Debt investments not held for collection are reported at

a$.$ amortized cost.

b$.$ fair value.

c$.$ the lower of amortized cost or fair value.

d$.$ net realizable value.

$15-$ Which of the following is not a financial asset?

a$.$ Cash

b$.$ Equity investment

c$.$ Inventory

d$.$Receivables

$6$

$16-$ Debt investments not held for collection are reported at

a$.$ amortized cost.

b$.$ fair value.

c$.$ the lower of amortized cost or fair value.

d$.$ net realizable value.

$17-$ A held$-$for$-$collection debt investment is purchased at a premium. The entry to record the

amortization of the premium includes a

a$.$ Credit to Debt Investments.

b$.$ Credit to Interest Receivable.

c$.$ Credit to Interest Revenue.

d$.$ None of these answers are correct.

$18-$ Kern Company purchased bonds with a face amount of $400,000.$ Kern purchased the bonds

at $102$ and paid brokerage costs of $6,000.$ The amount to record as the cost of this debt

investment is

a$.406,000.$

b$.414,000.$

c$.408,000.$

d$.400,000.$

$19-$ Which of the following is not correct in regard to trading investments?

a$.$ They are held with the intention of selling them in a short period of time.

b$.$ Unrealized holding gains and losses are reported as part of net income.

c$.$ Any discount or premium is not amortized.

d$.$ All of these answer choices are correct.

$20-$ Patton Company purchased $400,000$ of $10\%$ bonds of Scott Co$.$ on January $1,2022,$ paying

$376,100.$ The bonds mature