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Intangible and Other Assets

1. Long lived properties items having no physical existence and whose value lies in the rights, privileges
and advantages they accord to the owner; identifiable non-monetary assets without physical substance.
a. Fixed asset c. Intangible Assets
b. Deferred Charges d. Tangible Assets

2. The original and planned investigation undertaken with the prospect of gaining new scientific or
technical knowledge and understanding.
a. Research c. Research and Development
b. Development d. Some other Answer

3. The application of research finding or other knowledge to a plan or design for the production of new or
substantially improved materials, devices, products, processes, systems or services before the start of
commercial production or use.
a. Research c. Research and Development
b. Development d. Some other Answer

4. Those costs of materials, personnel, purchased intangibles, contract services and a reasonable
allocation of indirect cost specifically related to research and development activities and which have no
alternative future uses.
a. Research expenses c. Research and Development expenses
b. Development expenses d. Some other Answer

5. An exclusive right granted by the government to an inventor enabling him to control the manufacture,
sale or other use of invention for a specified period of time.
a. Franchise c. Public Franchise
b. Patent d. Private Franchise

6. The right to manufacture sell or make use of a patent assigned by the patent owner.
a. License c. Licensee
b. Royalty d. Grant

7. The periodic payment made by the licensee to the patent holder as compensation for the assignment to
the former of the latter's patent rights
a. License c. License Fee
b. Royalty d. Grant

8. An exclusive right given to an applicant to publish or sell any literary, musical or artistic work
a. Franchise c. Copyright
b. License d. Answer not given

9. Any distinguishing device, symbol, label or name used to differentiate a product, article, business or
services from others
a. Registered name c. Brand name
b. Tradename or Trademark d. Label

10. A privilege granted by the government permitting a monopoly, or the use of public property subject to
government regulations
a. Franchise c. Public Franchise
b. Patent d. Private Franchise
11. A privilege often exclusive given to distributor or dealer by a manufacturer, to sell the manufacturer's
product within a specified territory; also called a distributor or dealership.
a. Franchise c. Public Franchise
b. Patent d. Private Franchise

12. Alterations or improvements made by the lessee on leased property


a. Leasehold improvements c. Operating lease
b. Leased premises d. Finance lease

13. The present value of the amount by which earnings of the business exceed a normal or basic return
on its net assets exclusive of goodwill
a. Goodwill c. Negative Goodwill
b. Franchise d. Some other Answer

14. Expenditures incurred in connection with the original incorporation and promotion of an enterprise.
a. Deferred Charges c. Pre-operating costs
b. Organization Expenses d. Promoters and underwriters fee

15. Advance payments made for services or supplies which have not been utilized by the business, and
which are expected to be consumed in the next accounting period or operation cycle whichever is longer
a. Prepaid Expenses c. Pre operating costs
b. Deferred Charges d. Advances

16. Expenditures which are applicable to operations of future accounting periods


a. Prepaid Expenses c. Pre operating costs
b. Deferred Charges d. Advances

General Concepts

17. Which of the following is not a characteristic of an intangible asset?


a. Physically exists c. Relatively long lived
b. Confers certain rights d. Value highly uncertain

18. Which of the following is an example of an intangible asset with unlimited life
a. Copyrights c. Trademarks and Trade names
b. Patents d. Some other Answer

19. Which of the following is an identifiable intangible asset?


a. Patents c. Goodwill
b. Copyrights d. Licenses

20. At the time of acquisition, an intangible asset may be valued at


a. cash paid c. the present value of amount to be paid
b. fair value of non-cash asset given up d. Any of the above

21. Which of the following is generally used in amortizing intangible assets subject to amortization?
a. straight line method c. scientific method
b. unit of production method d. Kairus triple declining method

22. Deferred charges


a. are payments for services which have not yet been utilized by the business
b. are cash received or other assets recognized for goods and services that are to be supplied in
the future periods
c. represents that portion of an expenditure for a service made prior to the balance sheet date
and which will be consumed in the normal operating cycle
d. are prepayments for services or benefits that are to be received over a number of years.

23. Deferred charges classification in the balance sheet sometimes contains heterogeneous items. Which
of the following should not be included under the deferred charges classification
a. Unamortized bond discount
b. Pre operating expenses
c. Research and development costs
d. Deferred pension cost

PAS 38 on research and development

24. Which of the following items is a research activity?


a. The design, construction and testing of a chosen alternative for new or improved materials,
devices, products processes, systems or services
b. The formulation, design, evaluation and final selection of possible alternatives for new or
improved materials, devices, products, processes, systems or services
c. The design of tools, jigs, moulds and dies involving new technology
d. The design, construction and operation of a pilot plant that is not of a scale economically
feasible for commercial production

25. Which of the following items is a development activity?


a. Activities aimed at obtaining new knowledge
b. The search for, evaluation and final selection of, applications of research findings or other
knowledge
c. The design, construction and testing of pre-production or pre use prototypes and models
d. The search for alternatives for materials, devices, products, processes, systems or services

26. Which is incorrect concerning acquisition of an intangible asset as part of a business combination?
a. The cost of the intangible asset is based on its fair value at the date of acquisition
b. If there is an active market from the intangible asset, the fair value is equal to the quoted
market price which is usually the current bid price
c. If there is no active market for the intangible asset, the fair value is equal to the amount that
would be paid by the entity in an arm's length transaction between knowledgeable and willing parties.
d. The fair value of an intangible asset acquired in a business combination cannot be measure
with sufficient reliability separately from goodwill.

27. The cost of internally generated assets includes all of the following except
a. Cost of materials and services used in generating the intangible asset.
b. Compensation cost of personnel directly engaged in generating the asset.
c. Fees to register a legal right
d. Expenditure on training staff to operate the asset.

28. The following expenditures shall be expensed when incurred, except


a. Start up costs
b. advertising and promotion costs
c. Business relocation or reorganization costs
d. Payment in advance of delivery of goods or the rendering of services

29. Which statement is correct concerning amortization of intangible assets?


I. Intangible assets with limited or finite life are amortized over their useful life
II. Intangible assets with indefinite life are not amortized but are tested for impairment at least
weekly.
a. I only
b. II only
c. Both I and II
d. Neither I nor II

30. Directly attributable costs of preparing the intangible asset for its intended use include all of the
following except

a. Cost of employee benefits arising directly from bringing the asset to its working condition
b. Professional fees arising directly from bringing the asset to its working condition
c. Costs of testing whether the asset is functioning properly
d. Initial operating losses

Answer keys:
1. c
2. a
3. b
4. c
5. b
6. a
7. b
8. c
9. b
10. c
11. d
12. a
13. b
14. c
15. b
16. a
17. a
18. c
19. c
20. c
21. a
22. d
23. c
24. b
25. c
26. d
27. d
28. d
29. a - II is wrong -> not weekly.
30. d