Test Bank For - (Volume 1) 14th Canadian Edition By Kieso, Weyg...

Test Bank For Intermediate Accounting (Volume 1) 14th Canadian Edition By Kieso, Weygandt, Warfield, Wiley, Wiecek, McConomy (All Chapters 0-12, 100% Original Verified, A+ Grade) All Chapters Arranged

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Intermediate Accounting, 14Ce (Kieso) Chapter 12 Intangible Assets and Goodwill 1) Which of the following is NOT generally true of intangible assets and goodwill?

• Many major public companies have significant amounts of intangible assets and goodwill

listed on their balance sheets.

• The major assets of today's information and service providers are likely to be tangible.
• The major assets of today's information and service providers are likely to be intangible.
• Since identifying and measuring intangibles and goodwill is often difficult, they are not

always reported on the balance sheet.

Answer: B

Diff: 1

Learning Objective: Understand the importance of goodwill and intangible assets from a business perspective and describe their characteristics.Section Reference: The Business Importance and Characteristics of Goodwill and Intangible Assets

CPA: Financial Reporting

Bloomcode: Knowledge

AACSB: Analytic

2) Which of the following best describes goodwill?

• internal value generated by way of a brand image
• the excess of fair value transferred to acquire a business over fair value amounts assigned to

identifiable assets

• internal value generated by way of a company's charitable activities and philanthropic acts
• a company's intentions to impact the community and environment in a favourable way

Answer: B

Diff: 1

Learning Objective: Understand the importance of goodwill and intangible assets from a business perspective and describe their characteristics.Section Reference: The Business Importance and Characteristics of Goodwill and Intangible Assets

CPA: Financial Reporting

Bloomcode: Knowledge

AACSB: Analytic

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3) The three main characteristics of intangible assets are

• identifiability, non-physical existence, and nonmonetary nature.
• identifiability, physical existence, and separability.
• separability, identifiability, and nonmonetary nature.
• physical existence, nonmonetary nature, and identifiability.

Answer: A

Diff: 1

Learning Objective: Understand the importance of goodwill and intangible assets from a business perspective and describe their characteristics.Section Reference: The Business Importance and Characteristics of Goodwill and Intangible Assets

CPA: Financial Reporting

Bloomcode: Knowledge

AACSB: Analytic

4) Which of the following is NOT a type of intangible asset?

• Trademark
• Financial instrument
• Patent
• Copyright

Answer: B

Diff: 1

Learning Objective: Understand the importance of goodwill and intangible assets from a business perspective and describe their characteristics.Section Reference: The Business Importance and Characteristics of Goodwill and Intangible Assets

CPA: Financial Reporting

Bloomcode: Knowledge

AACSB: Analytic

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5) Which of the following is INCORRECT about the measurement of purchased intangible assets?

• Purchased intangible assets are measured at cost, which is their fair value at acquisition.
• Cost includes the acquisition cost and all expenditures necessary to make the intangible asset

ready for its intended use.

• If an intangible asset is acquired due to a government grant, the asset is not recognized in the

accounting records as there is no cost to the entity receiving the intangible asset.

• The cost of the intangible received in a nonmonetary exchange is the fair value of the

consideration given or the fair value of the intangible received, whichever is more clearly evident.

Answer: C

Diff: 1

Learning Objective: Identify and apply the recognition and measurement requirements for purchased intangible assets.Section Reference: Recognition and Measurement of Intangible Assets at Acquisition

CPA: Financial Reporting

Bloomcode: Knowledge

AACSB: Analytic

6) Babel Corporation acquired all outstanding shares of Connor Ltd. for $2.1 million. Selected

information relating to Connor was as follows:

Fair value of identifiable net assets: $2.0 million

Book value of identifiable net assets: $1.6 million

Cash balance:$0.1 million

Babel will recognize goodwill of

• $0.1 million.
• $1.1 million.
• $2.1 million.
• $1.5 million.

Answer: A

Explanation: $2.1 million - $2.0 million = $0.1 million

Diff: 2

Learning Objective: Identify and apply the recognition and measurement requirements for purchased intangible assets.Section Reference: Recognition and Measurement of Intangible Assets at Acquisition

CPA: Financial Reporting

Bloomcode: Application

AACSB: Analytic

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