Chapter 12
1. Which intangible assets are amortized? Limited-Life Indefinite-Life a. Yes Yes b. Yes No
c. No Yes d. No No

2. The cost of successfully defending a patent suit 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 product.
d. amortized over the remaining estimated useful life of the patent.

3. Which of the following is not an intangible asset?
a. Trade name
b. Research and development costs
c. Franchise
d. Copyrights

4. When a new company is acquired, which of these intangible assets, unrecorded on the acquired company’s books, might be recorded in addition to goodwill?
a. A brand name.
b. A patent.
c. A customer list.
d. All of these answer choices are correct.

5. A loss on impairment of an intangible asset is the difference between the asset’s
a. carrying amount and the expected future net cash flows. (triggers impairment)
b. carrying amount and its fair value. (calculate the impairment loss)
c. fair value and the expected future net cash flows.
d. book value and its fair value.

6. When a patent is amortized, the credit is usually made to
a. the Patents account.
b. an Accumulated Amortization account(accumulated amort account not used for patent)
c. a Deferred Credit account.
d. an expense account.

7. Which of the following is considered research and development costs?
a. Planned search or critical investigation aimed at discovery of new knowledge.
b. Research costs incurred under contract with another company.
c. Commissions to sales staff marketing a new product.
d. Cost of marketing research to promote a new product.

Chapter 13 8. Which of the following may be a current liability?
a.