FAR — Financial Accounting & Reporting — Quiz 53

Questions in this quiz (10)

1. Which of the following reduces the carrying value of a long-term asset?

   • Capital improvement
   • Depreciation expense
   • Asset acquisition
   • Equipment upgrade

2. Which accounting process allocates the cost of a copyright over its useful life?

   • Depreciation
   • Depletion
   • Amortization
   • Impairment

3. Which intangible asset typically has a finite legal life?

   • Trademark
   • Patent
   • Goodwill
   • Trade name

4. Which intangible asset is not amortized but tested annually for impairment?

   • Copyright
   • Franchise
   • Indefinite-life trademark
   • Patent

5. When does asset impairment occur?

   • When asset value increases
   • When carrying value exceeds recoverable amount
   • When depreciation is recorded
   • When an asset is purchased

6. Which account is recorded when an impairment occurs?

   • Revenue
   • Impairment loss
   • Inventory
   • Accounts payable

7. Where are impairment losses reported?

   • Balance sheet
   • Income statement
   • Statement of cash flows
   • Statement of retained earnings

8. Which best describes amortization expense?

   • Allocation of tangible asset cost
   • Allocation of natural resource cost
   • Allocation of intangible asset cost
   • Increase in asset value

9. Which is a characteristic of goodwill?

   • Fixed useful life
   • Amortized annually
   • Recognized in business acquisitions
   • Classified as equipment

10. Where are intangible assets reported?

    • Income statement
    • Balance sheet
    • Statement of retained earnings
    • Statement of cash flows