QUESTION 6

1. Intangible assets generally represent exclusive rights that provide benefits to the owner.

   True

   False

3 points

QUESTION 7

1. Both trading securities and securities available-for-sale are reported at their fair values.

   True

   False

3 points

QUESTION 8

1. A company purchased a piece of equipment by paying $5,000 cash. A shipping cost of $400 to get the equipment to its factory was also incurred. The fair value of the equipment was $7,000 at the time of the purchase. For what amount should the company record the equipment?

   	a.	$5,000.
   	b.	$7,000.
   	c.	$7,400.
   	d.	$5,400.

3 points

QUESTION 9

1. For financial reporting purposes, goodwill:

   	a.	May be recorded when a company purchases another business.
   	b.	May be recorded whenever a company achieves a level of net income that exceeds the industry average.
   	c.	Is amortized over its useful life.
   	d.	Must be expensed in the period it is recorded because benefits from goodwill are difficult to identify.

3 points

QUESTION 10

1. Which category of securities is presented on the balance sheet at amortized cost?

   	a.	Securities available-for-sale.
   	b.	Equity investments of less than 20% ownership.
   	c.	Held-to-maturity securities.
   	d.	Trading securities.