Question 6

The reason goodwill is sometimes referred to as a master valuation account is because ___________.

Question 6 options:

A.	it represents the purchase price of a business that is about to be sold
B.	it is the difference between the fair value of the net tangible and identifiable intangible assets as compared with the purchase price of the acquired business
C.	the value of a business is computed without consideration of goodwill and then goodwill is added to arrive at a master valuation
D.	it is the only account in the financial statements that is based on value, all other accounts are recorded at an amount other than their value

Question 7

Which of the following is often reported as an extraordinary item?

Question 7 options:

A.	Amortization expense
B.	Impairment losses for intangible assets
C.	Research and development costs
D.	None of the above

Question 8

When a patent is amortized, the credit is usually made to _________.

Question 8 options:

A.	the Patent account
B.	an Accumulated Amortization account
C.	a Deferred Credit account
D.	an Expense account

Question 9

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

Question 9 options:

A.	Sum-of-the-years'-digits
B.	Straight-line
C.	Units of production
D.	Double-declining-balance

Question 10

Goodwill may be recorded when ____________.

Question 10 options:

A.	it is identified within a company
B.	one company acquires another in a business combination
C.	the fair value of a company's assets exceeds their cost
D.	a company has exceptional customer relations