Luke Hodges
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Luke Hodges
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ACC210 Financial Reporting: Week 4, Intangibles Quiz 1.4

ACC210 Financial Reporting: Week 4, Intangibles Quiz 1.4

Question 1 of 20

1

The two key characteristics of intangible assets are that they are identifiable and that they:

Select one of the following:

  • have physical substance;

  • lack physical substance;

  • are monetary assets;

  • represent current obligations of the entity.

Explanation

Question 2 of 20

1

The concept that distinguishes other intangible assets from goodwill is:

Select one of the following:

  • length of useful life;

  • lack of physical substance;

  • identifiability;

  • materiality.

Explanation

Question 3 of 20

1

Items such as market knowledge, effective advertising programs, fundraising capabilities and trained staff are not regarded as assets because they:

Select one of the following:

  • are not controlled by the entity;

  • are monetary items;

  • cannot be measured;

  • are too difficult to manage.

Explanation

Question 4 of 20

1

Under AASB 138 all expenditure on research activities must be:

Select one of the following:

  • capitalised as a current asset;

  • capitalised as an intangible asset;

  • recognised directly in retained earnings;

  • expensed.

Explanation

Question 5 of 20

1

The recognition criteria that an asset must meet before it may be recognised and presented in the financial statements include:

Select one of the following:

  • that the recognition of the asset is relevant to user decision making;

  • that the information about the asset is neutral;

  • a probability that future economic benefits will flow to the entity;

  • a likelihood that the cost of the asset is verifiable.

Explanation

Question 6 of 20

1

When measuring an intangible asset initially, which of the following valuation methods must be used?

Select one of the following:

  • acquisition price;

  • cost;

  • fair value;

  • market value.

Explanation

Question 7 of 20

1

The cost of an intangible asset is comprised of the fair value of the consideration:

Select one of the following:

  • less legal costs incurred in the purchase;

  • plus indirect costs;

  • less directly attributable costs;

  • plus directly attributable costs.

Explanation

Question 8 of 20

1

An intangible asset acquired through a business combination is initially measured at:

Select one of the following:

  • fair value;

  • cost;

  • net present value;

  • realisable value.

Explanation

Question 9 of 20

1

Internally generated goodwill:

Select one of the following:

  • can be recognised when it is acquired as part of a business combination;

  • cannot be measured;

  • cannot be recognised;

  • is not identifiable.

Explanation

Question 10 of 20

1

The original and planned investigation undertaken with the prospect of gaining new knowledge is described as:

Select one of the following:

  • exploration;

  • research;

  • development;

  • investigation.

Explanation

Question 11 of 20

1

When a continuing project moves beyond the research stage it moves into a stage known as:

Select one of the following:

  • acquisition;

  • exploration;

  • development;

  • combination.

Explanation

Question 12 of 20

1

From an accounting perspective, expenditure on development is:

Select one of the following:

  • expensed as incurred;

  • capitalised as an intangible asset;

  • regarded as a contingent asset and not capitalised;

  • recognised directly as a part of equity.

Explanation

Question 13 of 20

1

When deciding whether to capitalise development expenditure as an intangible asset which of the following points must be satisfied? An entity must be able to demonstrate:
I. Its ability to sell the intangible asset.
II. Its intention to complete the intangible asset.
III. The technical feasibility of completing the intangible asset.
IV. Its ability to reliably measure the expenditure attributable to the intangible.

Select one of the following:

  • I, II and IV only;

  • I, III and IV only;

  • II, II and IV only;

  • I, II, III and IV.

Explanation

Question 14 of 20

1

When capitalising development costs an entity:

Select one of the following:

  • may include all previous costs whether written off or current period costs;

  • may include all indirect and directly attributable costs;

  • may not reinstate any previously expensed costs;

  • may capitalise the sum of all related research and development costs.

Explanation

Question 15 of 20

1

Which of the following intangibles may be capitalised by an entity?

Select one of the following:

  • Goodwill acquired in a business combination;

  • Internally generated mastheads;

  • Publishing titles developed within the entity;

  • Customer lists produced by the entity's marketing division.

Explanation

Question 16 of 20

1

Johnson Limited spent the following amounts on an engineering project: $10 000 on research salaries; $15 000 on equipment for a research laboratory; $30 000 on project development costs; and $6 000 on marketing costs. The amount that may capitalised is:

Select one of the following:

  • $61 000;

  • $51 000;

  • $36 000;

  • $30 000.

Explanation

Question 17 of 20

1

Subsequent to initial recognition of an intangible asset, an entity may choose to measure the item using the:

Select one of the following:

  • gross method;

  • cash flow method;

  • revaluation method;

  • net method.

Explanation

Question 18 of 20

1

Under the revaluation method of measuring an intangible, the asset is carried at fair value and subject to charges for:

Select one of the following:

  • inflation in value;

  • amortisation and impairment;

  • interest expense;

  • increment in value.

Explanation

Question 19 of 20

1

In circumstances where there is a revaluation decrement on revaluation of an intangible asset, any accumulated amortisation will be:

Select one of the following:

  • eliminated at the time of revaluation;

  • transferred immediately to a revaluation reserve account;

  • credited to profit or loss;

  • recognised as a gain on revaluation.

Explanation

Question 20 of 20

1

When subsequent expenditure on intangible assets occurs the costs are:

Select one of the following:

  • recognised directly in retained earnings account.

  • transferred to a revaluation reserve account;

  • capitalised;

  • immediately expensed.

Explanation

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