Intermediate Accounting II UPDATED
ACTUAL Exam Questions and CORRECT
Answers
Patent - CORRECT ANSWER✔✔- Exclusive right granted by the federal govt that gives the
owner control of manufacturer, sale
Has value if has competitive advantage
Patents have a - CORRECT ANSWER✔✔- 20 yr life
Patents have a - CORRECT ANSWER✔✔- Finite life, cannot be renewed
Patents are - CORRECT ANSWER✔✔- Amortized and reviewed for impairment
Copyright - CORRECT ANSWER✔✔- Gives owner exclusive right to publish, sell, or
control literary or art work for the life of the author, plus 70 yrs
Copyrights are - CORRECT ANSWER✔✔- Amortized, reviewed for impairment
Trademark - CORRECT ANSWER✔✔- A word, name, phrase, or Symbol that identifies a
source or a product and distinguishes it from the products of other companies
can be renewed if being used continuously
Trademarks are - CORRECT ANSWER✔✔- Reviewed for impairment, indefinite life
Trademarks have a - CORRECT ANSWER✔✔- 10 yr life
Goodwill - CORRECT ANSWER✔✔- Unidentifiable intangibles
Generate economic benefit for a company but cannot be separated and specifically associated
W/ an identifiable right
, Acquired goodwill - CORRECT ANSWER✔✔- The difference between the purchase price
of the acquired company and the fair value of its identifiable net assets.
Finite life - CORRECT ANSWER✔✔- An asset is amortized over useful life
Indefinite life - CORRECT ANSWER✔✔- An asset is not amortized, but reviewed for
impairment
Intangible assets - CORRECT ANSWER✔✔- Can be externally acquired or internally
developed
Purchased intangibles are capitalized at their acquisition cost, internally developed are
generally expensed
Identifiable intangible assets - CORRECT ANSWER✔✔- Can be separated from the
company and sold, transferred,licensed, rented, or exchanged.
Mainly Trademarkes, but also patents, customer relationships, lisenses, copyrights, franchise
rights
5 categories: marketing related, customer related, artistic related, contract based, technology
based
Amortization - CORRECT ANSWER✔✔- The allocation of the cost of intangible assets in a
systematic and rational manner over the assets useful life
Finite life, 2 steps for impairment: recoverability test, measurement of the loss
Which of the following are amortized? - CORRECT ANSWER✔✔- Patents, copyrights,
computer software costs
Impairment - CORRECT ANSWER✔✔- occurs when the fair value of the asset is less than
its carrying value
Indefinite life
Review for impairment annually
No impairment tests
ACTUAL Exam Questions and CORRECT
Answers
Patent - CORRECT ANSWER✔✔- Exclusive right granted by the federal govt that gives the
owner control of manufacturer, sale
Has value if has competitive advantage
Patents have a - CORRECT ANSWER✔✔- 20 yr life
Patents have a - CORRECT ANSWER✔✔- Finite life, cannot be renewed
Patents are - CORRECT ANSWER✔✔- Amortized and reviewed for impairment
Copyright - CORRECT ANSWER✔✔- Gives owner exclusive right to publish, sell, or
control literary or art work for the life of the author, plus 70 yrs
Copyrights are - CORRECT ANSWER✔✔- Amortized, reviewed for impairment
Trademark - CORRECT ANSWER✔✔- A word, name, phrase, or Symbol that identifies a
source or a product and distinguishes it from the products of other companies
can be renewed if being used continuously
Trademarks are - CORRECT ANSWER✔✔- Reviewed for impairment, indefinite life
Trademarks have a - CORRECT ANSWER✔✔- 10 yr life
Goodwill - CORRECT ANSWER✔✔- Unidentifiable intangibles
Generate economic benefit for a company but cannot be separated and specifically associated
W/ an identifiable right
, Acquired goodwill - CORRECT ANSWER✔✔- The difference between the purchase price
of the acquired company and the fair value of its identifiable net assets.
Finite life - CORRECT ANSWER✔✔- An asset is amortized over useful life
Indefinite life - CORRECT ANSWER✔✔- An asset is not amortized, but reviewed for
impairment
Intangible assets - CORRECT ANSWER✔✔- Can be externally acquired or internally
developed
Purchased intangibles are capitalized at their acquisition cost, internally developed are
generally expensed
Identifiable intangible assets - CORRECT ANSWER✔✔- Can be separated from the
company and sold, transferred,licensed, rented, or exchanged.
Mainly Trademarkes, but also patents, customer relationships, lisenses, copyrights, franchise
rights
5 categories: marketing related, customer related, artistic related, contract based, technology
based
Amortization - CORRECT ANSWER✔✔- The allocation of the cost of intangible assets in a
systematic and rational manner over the assets useful life
Finite life, 2 steps for impairment: recoverability test, measurement of the loss
Which of the following are amortized? - CORRECT ANSWER✔✔- Patents, copyrights,
computer software costs
Impairment - CORRECT ANSWER✔✔- occurs when the fair value of the asset is less than
its carrying value
Indefinite life
Review for impairment annually
No impairment tests
