Which of the following is considered an intangible asset?
a) Buildings
b) Inventory
c) Patents
d) Machinery
Answer: c) Patents
Which of the following statements about intangible assets is true?
a) They have physical substance.
b) They are easily measurable.
c) They have a finite useful life.
d) They are tangible in nature.
Answer: c) They have a finite useful life.
Which of the following is an example of an internally generated intangible asset?
a) Copyright purchased from another company
b) Trademark acquired through a business acquisition
c) Research and development costs incurred by the company
d) Software purchased from a third-party vendor
Answer: c) Research and development costs incurred by the company
How are internally generated intangible assets initially recognized on the balance sheet?
a) At historical cost
b) At fair value
c) At replacement cost
d) At zero value
Answer: d) At zero value
Which accounting standard governs the recognition and measurement of intangible assets?
a) International Financial Reporting Standards (IFRS)
b) Generally Accepted Accounting Principles (GAAP)
c) Securities and Exchange Commission (SEC) regulations
d) International Accounting Standards Board (IASB)
Answer: a) International Financial Reporting Standards (IFRS)
Which of the following is not an example of an intangible asset?
a) Goodwill
b) Trademark
c) Land
d) Customer relationships
Answer: c) Land
How are indefinite-lived intangible assets measured on the balance sheet?
a) Amortized over their useful life
b) Impaired if their fair value declines
c) Recorded at their historical cost
d) Tested for impairment annually
Answer: d) Tested for impairment annually
Which of the following is an example of a marketing-related intangible asset?
a) Customer lists
b) Research and development costs
c) Goodwill
d) Buildings
Answer: a) Customer lists
How are acquired intangible assets initially recognized on the balance sheet?
a) At their fair value
b) At their original cost
c) At their replacement cost
d) At their net present value
Answer: a) At their fair value
Which of the following is an example of a contractual intangible asset?
a) Trademark
b) Patent
c) Lease agreement
d) Brand reputation
Answer: c) Lease agreement
Which of the following is an example of a technology-based intangible asset?
a) Brand name
b) Copyright
c) Trade secret
d) Franchise agreement
Answer: c) Trade secret
How are research and development costs related to an intangible asset usually accounted for?
a) Capitalized and amortized over their useful life
b) Expensed as incurred
c) Recognized as a liability on the balance sheet
d) Disclosed as a contingent liability
Answer: b) Expensed as incurred
Which of the following is not a characteristic of an intangible asset?
a) Identifiability
b) Control
c) Physical substance
d) Future economic benefits
Answer: c) Physical substance
How are intangible assets with a finite useful life typically amortized?
a) Using the straight-line method
b) Using the double-declining balance method
c) Using the units-of-production method
d) They are not amortized
Answer: a) Using the straight-line method
Which financial statement should intangible assets be reported on?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of changes in equity
Answer: a) Balance sheet
Which of the following is an example of an intangible asset with an indefinite useful life?
a) Copyright
b) Patent
c) Goodwill
d) Trademark
Answer: c) Goodwill
What is the primary factor that determines the recognition of an intangible asset on the balance sheet?
a) Legal protection
b) Past performance
c) Probability of future benefits
d) Physical presence
Answer: c) Probability of future benefits
How are intangible assets tested for impairment?
a) By assessing their market value
b) By evaluating their historical cost
c) By conducting periodic revaluation
d) By comparing their carrying value to their recoverable amount
Answer: d) By comparing their carrying value to their recoverable amount
Which of the following is an example of an intangible asset that is not separable from the entity?
a) Copyright
b) Trademark
c) Customer relationships
d) Non-competition agreement
Answer: d) Non-competition agreement
How are internally generated brands usually accounted for on the balance sheet?
a) Capitalized and amortized over their useful life
b) Recognized as a contingent asset
c) Expensed as incurred
d) Disclosed as an off-balance sheet item
Answer: c) Expensed as incurred