Accounting Quiz

1. (TCO C) Which characteristic is not possessed by intangible assets? (Points: 5)

       MACROBUTTON HTMLDirect [pic] Physical existence.

       MACROBUTTON HTMLDirect [pic] Short-lived.

       MACROBUTTON HTMLDirect [pic] Result in future benefits.

       MACROBUTTON HTMLDirect [pic] Expensed over current and/or future years.

2. (TCO C) 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 (Points: 5)

       MACROBUTTON HTMLDirect [pic] charged off in the current period.

       MACROBUTTON HTMLDirect [pic] amortized over the legal life of the purchased patent.

       MACROBUTTON HTMLDirect [pic] added to factory overhead and allocated to production of the purchaser's product.

       MACROBUTTON HTMLDirect [pic] 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.

3. (TCO C) Intangible assets are reported on the balance sheet (Points: 5)

       MACROBUTTON HTMLDirect [pic] with an accumulated depreciation account.

       MACROBUTTON HTMLDirect [pic] in the property, plant, and equipment section.

       MACROBUTTON HTMLDirect [pic] separately from other assets.

       MACROBUTTON HTMLDirect [pic] none of the above.

4. (TCO D) Which of the following is true about accounts payable?

(1.) Accounts payable should not be reported at their present value.

(2.) When accounts payable are recorded at the net amount, a Purchase Discounts account will be used.

(3.) When accounts payable are recorded at the gross amount, a Purchase Discounts Lost account will be used. (Points: 5)

       MACROBUTTON HTMLDirect [pic] 1

       MACROBUTTON HTMLDirect [pic] 2

       MACROBUTTON HTMLDirect [pic] 3

       MACROBUTTON HTMLDirect [pic] Both 2 and 3 are true.

5. (TCO D) A contingency can be accrued when (Points: 5)

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