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Explaining amortization and how it applies to intangible assets. 1) Amortization of a pa

Explaining amortization and how it applies to intangible assets. 1) Amortization of a pa

 Explaining amortization and how it applies to intangible assets.

1) Amortization of a patent was ignored. This error would cause

A) the period's net income to be overstated.

B) the period's net income to be understated.

C) the period end assets to be understated.

D) None of these are correct.

2) The credit portion of the adjustment for the depletion of a coal mine was credited to the Coal Mine account. This error would cause

A) the period's net income to be overstated.

B) the period's net income to be understated.

C) the period end assets to be overstated.

D) None of these are correct.

3) An example of an intangible asset is

A) a patent.

B) a building.

C) assembly cost.

D) land.

4) Eagle Works traded a plant asset with a cost of $30,000 and accumulated amortization of $25,000 for a similar asset priced at $60,000. Assuming a trade-in of $2,500, the cost basis of the new asset under income tax rules is

A) $62,500.

B) $47,500.

C) $49,500.

D) $60,000.

5) The process of writing off an intangible asset is

A) amortization.

B) depletion.

C) amortization.

D) None of these answers are correct.

6) The exclusive right to produce and sell a manuscript is called a

A) copyright.

B) franchise.

C) patent.

D) goodwill.

7) The allocation of the cost of a natural resource is

A) amortization.

B) depletion.

C) amortization.

D) accrual.

8) Intellectual property assets are

A) amortized.

B) depleted.

C) amortized.

D) expensed.

9) All of the following are intangible assets EXCEPT

A) patents.

B) copyrights.

C) organizational costs.

D) accounts receivable.

10) A manufacturer or seller of a product may identify its merchandise and bar others from using the same identification by getting a

A) franchise

B) trademark

C) patent

D) copyright

Tripti 07-Dec-2019

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