True False

A copyright is an example of an artistic-related intangible asset.

T

A trademark may properly be considered to have an indefinite life.

T

Amortization is the systematic charge to income of the cost of an intangible asset.

T

During a period of rising costs, the use of FIFO will result in higher values of ending inventory compared to the use of LIFO

T

In all cases when FIFO is used, the cost of goods sold would be the same whether a perpetual or periodic system is used

T

Intangible assets are amortized over their useful lives unless the intangible can remain in existence indefinitely.

T

Superior management, favorable location and outstanding customer relationships are factors that can contribute to goodwill.

T

The FIFO cost flow method assumes that the earliest goods purchases are the ones that are sold first

T

A copyright would generally not be amortized.

F

Cost of goods available for sale is equal to beginning inventory plus ending inventory

F

Cost of goods available for sale is reported on the balance sheet

F

Lack of physical substance is the only characteristic of intangible assets that distinguishes them from all other assets reported on the balance sheet.

F

When a company pays the cost of shipping goods to a customer, the shipping costs are added to the cost of the inventory sold

F

Costs incurred internally to create intangibles are generally the basis for recording intangible assets, which are then amortized over the estimated life of the intangible asset.

F - internally generated costs are typically expensed as incurred.

Goodwill can only be recorded when one entity purchases another entity and pays more for the business than the book value of the net identifiable assets acquired in the purchase.

F - replace the term "book value" with "fair value" for this statement to be true.

The intangible asset that consists of a word, phrase, symbol or design registered with the federal government that identifies the source and quality of a unique good or serice is called a copyright.

F - this is the definition of a trademark

Under a periodic inventory system, all purchases and sales of inventory are recorded at the time of purchase or sale

F, sales are recorded as if they occurred on the last day of the month

During a period of rising costs, the use of LIFO will result in a lower sales revenue compared to the use of FIFO

F, sales revenue is not affected by the inventory cost flow assumption

Goodwill generated internally should be capitalized

False, goodwill can only be recorded when a company acquires another company.

Goodwill should be amortized over its useful life.

False, goodwill has an indefinite life and should not be amortized.

Legal fees incurred in successfully defending a patent suit are expensed as incurred.

False, legal fees should be capitalized.