Question 26

The right granted to authors and other creative artists for their expressive works is termed a

Copyright

Trademark

Patent

Franchise

Question 27

A purchased patent has a remaining life of 15 years. It should be

Expensed in the year of acquisition

Amortized over 15 years regardless of its useful life

Amortized over its useful life if less than 15 years

Amortized over 40 years

Question 28

Lomax Corporation declares and distributes a cash dividend that is a result of current earnings. How will the receipt of those dividends affect the investment account of the investor under each of the following accounting methods? i) Fair Value Method ii) Equity Method

No Effect No Effect

Decrease No Effect

No Effect Decrease

Increase Decrease

Question 29

When a patent is successfully defended in court, the cost of the lawsuit

Should be expensed as incurred because it is a period cost.

Should be added to the cost of the patent and depreciated over the remaining useful life of the patent.

Should be added to the cost of the patent which is then expensed as a period cost.

Has already been expensed so there is no further action to take.

Question 30

Pence Corporation, which accounts for its investments in the common stock of Walsh Company by the equity method, should ordinarily record a dividend received from Walsh as

An addition to the carrying value of the investment

Dividend revenue

A reduction of the carrying value of the investment

Revenue from affiliate