Quiz 10 ch10 Key

Quiz 10 ch10 Key - as a good name superior management or...

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Quiz 10 Key 1. Which of the following principles best describes the current method of accounting under the U.S. GAAP for research and development costs? 1. Associating cause and effect 2. Systematic and rational allocation 3. Income tax minimization 4. Immediate recognition as an expense 2. An asset is being constructed for an enterprise's own use. The asset has been financed with a specific new borrowing. The interest cost incurred during the construction period as a result of expenditures for the asset is 1. a part of the acquisition cost of the asset to be expensed over the estimated useful life of the asset. 2. interest expense in the construction period. 3. recorded as a deferred charge and amortized over the term of the borrowing. 4. either expensed or capitalized in the asset account. 3. Goodwill should be recorded in the accounting records only when 1. it is separately purchased from another company. 2. it can be established that a definite advantage has resulted to a firm from some item such
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Unformatted text preview: as a good name, superior management, or reputation. 3. it is acquired through the purchase of another business entity. 4. a firm reports above normal earnings for five or more consecutive years. 4. Which of the following expenditures should be expensed? 1. expenditures for regular maintenance to keep the asset in existing operating condition. 2. expenditure that increases the efficiency of the asset. 3. expenditure that extends the assets useful life. 4. none of them. 5. Interest should be capitalized for assets that are 1. in use for their intended use in the earnings activities of the enterprise. 2. being constructed as discrete projects for an enterprise's own use. 3. not currently being used in the earnings activities. 4. routinely produced on a repetitive basis for inventory....
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Quiz 10 ch10 Key - as a good name superior management or...

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