Acct551 Intermediate Accounting Ii

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Week 8 : Final Week - Final Exam Page 1 1. (TCO C) Which of the following characteristics do intangible assets possess? (Points : 5) Physical existence Claim to a specific amount of cash in the future Long-lived Held for resale 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) charged off in the current period. amortized over the legal life of the purchased patent. added to factory overhead and allocated to production of the purchaser's product. 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) with an accumulated depreciation account. in the property, plant, and equipment section. separately from other assets. None of the above 4. (TCO D) Liabilities are (Points : 5) any accounts having credit balances after closing entries are made. deferred credits that are recognized and measured in conformity with generally accepted accounting principles. obligations to transfer ownership shares to other entities in the future. obligations arising from past transactions and payable in assets or services in the future. 5. (TCO D) A contingency can be accrued when (Points : 5) it is certain that funds are available to settle the disputed amount. an asset may have been impaired. the amount of the loss can be reasonably estimated, and it is probable that an asset has been impaired or a liability incurred. it is probable that an asset has been impaired or a liability incurred, even though the amount of the loss cannot be reasonably estimated. 6. (TCO D) An electronics store is running a promotion in which, for every video game

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