Intangible Assets - CPA Financial Accounting and Reporting (FAR)
Card 1 of 24
Which of the following is correct regarding accounting for patent costs?
Which of the following is correct regarding accounting for patent costs?
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Most costs incurred to generate a patent internally will be expenses; however, legal costs to defend an existing patent will be capitalized if the legal proceedings are successful. When an existing patent is purchased from another party, that cost is capitalized.
Most costs incurred to generate a patent internally will be expenses; however, legal costs to defend an existing patent will be capitalized if the legal proceedings are successful. When an existing patent is purchased from another party, that cost is capitalized.
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Which of the following is correct regarding costs associated with goodwill?
Which of the following is correct regarding costs associated with goodwill?
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Costs to develop and maintain goodwill be expensed, not capitalized. Goodwill itself is capitalized but not amortized.
Costs to develop and maintain goodwill be expensed, not capitalized. Goodwill itself is capitalized but not amortized.
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Pop Co purchases a patent in Year 1 from another organization at the cost of $100,000. In Year 3, Pop Co defended its patent in a law suit, during which it spent $20,000 in legal fees. Pop Co was successful in defending the patent. The entry to record the $20,000 in legal fees should include which of the following?
Pop Co purchases a patent in Year 1 from another organization at the cost of $100,000. In Year 3, Pop Co defended its patent in a law suit, during which it spent $20,000 in legal fees. Pop Co was successful in defending the patent. The entry to record the $20,000 in legal fees should include which of the following?
Tap to reveal answer
Costs incurred to defend a patent will be capitalized if the lawsuit is successful. Therefore, the entry to record these costs will include a debit to an intangible asset.
Costs incurred to defend a patent will be capitalized if the lawsuit is successful. Therefore, the entry to record these costs will include a debit to an intangible asset.
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Under IFRS rules, which of the following statements about intangible assets is correct?
Under IFRS rules, which of the following statements about intangible assets is correct?
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Internally generated goodwill cannot be capitalized and is treated as an expense in the period incurred.
Internally generated goodwill cannot be capitalized and is treated as an expense in the period incurred.
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Are routine efforts to improve an existing product considered R&D expenses?
Are routine efforts to improve an existing product considered R&D expenses?
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Routine expenses to maintain a product that already exists could not be R&D as the product is technologically feasible.
Routine expenses to maintain a product that already exists could not be R&D as the product is technologically feasible.
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A long lived asset should be tested for recoverability:
A long lived asset should be tested for recoverability:
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Carrying amounts of fixed long term assets should be tested for recoverability no less than annually or when circumstances indicate a possible permanent change in carrying amount.
Carrying amounts of fixed long term assets should be tested for recoverability no less than annually or when circumstances indicate a possible permanent change in carrying amount.
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Which of the following is correct regarding accounting for patent costs?
Which of the following is correct regarding accounting for patent costs?
Tap to reveal answer
Most costs incurred to generate a patent internally will be expenses; however, legal costs to defend an existing patent will be capitalized if the legal proceedings are successful. When an existing patent is purchased from another party, that cost is capitalized.
Most costs incurred to generate a patent internally will be expenses; however, legal costs to defend an existing patent will be capitalized if the legal proceedings are successful. When an existing patent is purchased from another party, that cost is capitalized.
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Which of the following is correct regarding costs associated with goodwill?
Which of the following is correct regarding costs associated with goodwill?
Tap to reveal answer
Costs to develop and maintain goodwill be expensed, not capitalized. Goodwill itself is capitalized but not amortized.
Costs to develop and maintain goodwill be expensed, not capitalized. Goodwill itself is capitalized but not amortized.
← Didn't Know|Knew It →
Pop Co purchases a patent in Year 1 from another organization at the cost of $100,000. In Year 3, Pop Co defended its patent in a law suit, during which it spent $20,000 in legal fees. Pop Co was successful in defending the patent. The entry to record the $20,000 in legal fees should include which of the following?
Pop Co purchases a patent in Year 1 from another organization at the cost of $100,000. In Year 3, Pop Co defended its patent in a law suit, during which it spent $20,000 in legal fees. Pop Co was successful in defending the patent. The entry to record the $20,000 in legal fees should include which of the following?
Tap to reveal answer
Costs incurred to defend a patent will be capitalized if the lawsuit is successful. Therefore, the entry to record these costs will include a debit to an intangible asset.
Costs incurred to defend a patent will be capitalized if the lawsuit is successful. Therefore, the entry to record these costs will include a debit to an intangible asset.
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Under IFRS rules, which of the following statements about intangible assets is correct?
Under IFRS rules, which of the following statements about intangible assets is correct?
Tap to reveal answer
Internally generated goodwill cannot be capitalized and is treated as an expense in the period incurred.
Internally generated goodwill cannot be capitalized and is treated as an expense in the period incurred.
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Are routine efforts to improve an existing product considered R&D expenses?
Are routine efforts to improve an existing product considered R&D expenses?
Tap to reveal answer
Routine expenses to maintain a product that already exists could not be R&D as the product is technologically feasible.
Routine expenses to maintain a product that already exists could not be R&D as the product is technologically feasible.
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A long lived asset should be tested for recoverability:
A long lived asset should be tested for recoverability:
Tap to reveal answer
Carrying amounts of fixed long term assets should be tested for recoverability no less than annually or when circumstances indicate a possible permanent change in carrying amount.
Carrying amounts of fixed long term assets should be tested for recoverability no less than annually or when circumstances indicate a possible permanent change in carrying amount.
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Which of the following is correct regarding accounting for patent costs?
Which of the following is correct regarding accounting for patent costs?
Tap to reveal answer
Most costs incurred to generate a patent internally will be expenses; however, legal costs to defend an existing patent will be capitalized if the legal proceedings are successful. When an existing patent is purchased from another party, that cost is capitalized.
Most costs incurred to generate a patent internally will be expenses; however, legal costs to defend an existing patent will be capitalized if the legal proceedings are successful. When an existing patent is purchased from another party, that cost is capitalized.
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Which of the following is correct regarding costs associated with goodwill?
Which of the following is correct regarding costs associated with goodwill?
Tap to reveal answer
Costs to develop and maintain goodwill be expensed, not capitalized. Goodwill itself is capitalized but not amortized.
Costs to develop and maintain goodwill be expensed, not capitalized. Goodwill itself is capitalized but not amortized.
← Didn't Know|Knew It →
Pop Co purchases a patent in Year 1 from another organization at the cost of $100,000. In Year 3, Pop Co defended its patent in a law suit, during which it spent $20,000 in legal fees. Pop Co was successful in defending the patent. The entry to record the $20,000 in legal fees should include which of the following?
Pop Co purchases a patent in Year 1 from another organization at the cost of $100,000. In Year 3, Pop Co defended its patent in a law suit, during which it spent $20,000 in legal fees. Pop Co was successful in defending the patent. The entry to record the $20,000 in legal fees should include which of the following?
Tap to reveal answer
Costs incurred to defend a patent will be capitalized if the lawsuit is successful. Therefore, the entry to record these costs will include a debit to an intangible asset.
Costs incurred to defend a patent will be capitalized if the lawsuit is successful. Therefore, the entry to record these costs will include a debit to an intangible asset.
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Under IFRS rules, which of the following statements about intangible assets is correct?
Under IFRS rules, which of the following statements about intangible assets is correct?
Tap to reveal answer
Internally generated goodwill cannot be capitalized and is treated as an expense in the period incurred.
Internally generated goodwill cannot be capitalized and is treated as an expense in the period incurred.
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Are routine efforts to improve an existing product considered R&D expenses?
Are routine efforts to improve an existing product considered R&D expenses?
Tap to reveal answer
Routine expenses to maintain a product that already exists could not be R&D as the product is technologically feasible.
Routine expenses to maintain a product that already exists could not be R&D as the product is technologically feasible.
← Didn't Know|Knew It →
A long lived asset should be tested for recoverability:
A long lived asset should be tested for recoverability:
Tap to reveal answer
Carrying amounts of fixed long term assets should be tested for recoverability no less than annually or when circumstances indicate a possible permanent change in carrying amount.
Carrying amounts of fixed long term assets should be tested for recoverability no less than annually or when circumstances indicate a possible permanent change in carrying amount.
← Didn't Know|Knew It →
Which of the following is correct regarding accounting for patent costs?
Which of the following is correct regarding accounting for patent costs?
Tap to reveal answer
Most costs incurred to generate a patent internally will be expenses; however, legal costs to defend an existing patent will be capitalized if the legal proceedings are successful. When an existing patent is purchased from another party, that cost is capitalized.
Most costs incurred to generate a patent internally will be expenses; however, legal costs to defend an existing patent will be capitalized if the legal proceedings are successful. When an existing patent is purchased from another party, that cost is capitalized.
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Which of the following is correct regarding costs associated with goodwill?
Which of the following is correct regarding costs associated with goodwill?
Tap to reveal answer
Costs to develop and maintain goodwill be expensed, not capitalized. Goodwill itself is capitalized but not amortized.
Costs to develop and maintain goodwill be expensed, not capitalized. Goodwill itself is capitalized but not amortized.
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