136B_S07_1

136B_S07_1 - Anderson ECON 136B Exam#1 Name Answer...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
July 16, 2007 Anderson ECON 136B Exam #1 Name _________________________ Answer questions #1-25 on green scantron and #26, 27 & 28 in your blue- book. You may take this exam with you. 1. If an intangible asset is being amortized over a definite life, the following is true: a. Impairment testing is never required. b. Impairment testing is required whenever there is an event or change in circumstances indicating a possible impairment. c. Impairment testing is required to be performed on an annual basis. d. Impairment testing is required only if the auditor deems it to be necessary. 2. Indefinite lived intangible assets should be tested for impairment: a. At least annually. b. Only if there has been an event or change in circumstance indicating an impairment. c. Only if the undiscounted cash flows are less than net book value. d. Only if the discounted cash flows are less than net book value. 3. A definite life intangible should be tested for impairment: a. At least annually. b. Only if there has been an event or change in circumstance indicating an impairment. c. Only if the undiscounted cash flows are less than net book value. d. Only if the discounted cash flows are less than net book value. 4. An indefinite life intangible asset should be amortized: a. Over a period not to exceed 40 years. b. Over a period not to exceed 100 years. c. Over a period of the creator's life plus 40 years. d. Never. 5. Costs incurred internally to create intangibles are a. capitalized. b. capitalized if they have an indefinite life. c. expensed as incurred. d. expensed only if they have a limited life.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Exam #1--Page 2 6. The cost of purchasing patent rights for a product that might otherwise have seriously competed with one of the purchaser's patented products should be a. charged off in the current period. b. amortized over the legal life of the purchased patent. c. added to factory overhead and allocated to production of the purchaser's product. d. amortized over the remaining estimated life of the original patent covering the product whose market would have been impaired by competition from the newly patented product. 7. Easton Company and Lofton Company were combined in a purchase transaction. Easton was able to acquire Lofton at a bargain price. The sum of the market or appraised values of identifiable assets acquired less the fair value of liabilities assumed exceeded the cost to Easton. After revaluing noncurrent assets to zero, there was still some "negative goodwill." Proper accounting treatment by Easton is to report the amount as a. an extraordinary gain. b. part of current income in the year of combination. c. a deferred credit and amortize it. d. paid-in capital. 8. The intangible asset goodwill may be
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 01/31/2010 for the course ECON 136B taught by Professor Anderson during the Spring '08 term at UCSB.

Page1 / 11

136B_S07_1 - Anderson ECON 136B Exam#1 Name Answer...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online