Intangibles with finite lives that can be measured are amortized.

Intangibles with finite lives that can be measured are amortized.

Intangibles with finite lives that can be
measured are amortized.

7.6-3 Amortization is usually computed on a
units-of-production basis.

7.6-4 Goodwill is recognized only when the purchase price exceeds
the value of the net liabilities in the acquisition of another company.

7.6-5 Goodwill may arise when the purchaser buys another company
that has higher than normal earning power.

7.6-6 A trademark may have an indefinite life and,
therefore, not be amortized.

70

7.6-7 Research and
development costs are expensed over their useful or legal life.

7.6-8 If at the end of the year, goodwill is worth more than at
the beginning of the year, then an entry must be made to increase the goodwill.

7.6-9 Amortization is most closely associated with
which asset?

A) Copyright

B) Building

C) Natural
gas lease

D) All of the
above

7.6-10 Which of the following statements regarding
intangible assets is NOT true?

A) Intangible
assets are long-lived assets with no physical form.

B) Intangible
assets are recorded at their acquisition cost.

C) Intangible
assets with a finite life are not amortized.

D) Intangible
assets with an indefinite life are not amortized.

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7.6-11 Amortization
expense:

A) is the
title of the expense associated with natural resources.

B) is
recorded for intangible assets with a finite life.

C) is
recorded for assets with an indefinite life.

cannot be credited directly to the asset account


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