Question : 51. Which of the following not true about goodwill? A. Goodwill reflects the : 1230693

 

 

51. Which of the following is not true about goodwill? 
A. Goodwill reflects the value of knowledgeable employees.
B. Goodwill reflects the value of a reputation for quality products.
C. Under U.S. GAAP, goodwill has an indefinite life, and firms do not amortize the amount recognized as goodwill.
D. Firms must test goodwill annually for a loss in value.
E. Under IFRS, goodwill has an indefinite life, and firms amortize the amount recognized as goodwill.

 

52. Which of the following is not true about goodwill? 
A. Goodwill reflects the value of knowledgeable employees.
B. Goodwill reflects the value of a reputation for quality products.
C. Under IFRS, goodwill has an indefinite life, and firms do not amortize the amount recognized as goodwill.
D. Firms must test goodwill annually for a loss in value.
E. Under U.S. GAAP, goodwill has an indefinite life, and firms amortize the amount recognized as goodwill.

 

53. The _____ of a long-lived asset is the cost of a series of future services.  
A. present value of future cash flows
B. acquisition cost
C. current fair market value
D. liquidation value
E. current cost

 

54. Which of the following is/are true about holding gains on assets? 
A. U.S. GAAP recognizes the holding gain on the assets for the increase in values.
B. IFRS permits recognition of the holding gains under certain circumstances.
C. IFRS precludes recognition of the holding gain on assets for the increase in values.
D. Under U.S. GAAP, if in a given period, an asset increases in value, the firm does not record depreciation and amortization during that period.
E. Under IFRS, if in a given period, an asset increases in value, the firm does not record depreciation and amortization during that period.

 

55. Which of the following is/are true about holding gains on assets? 
A. U.S. GAAP recognizes the holding gain on the assets for the increase in values.
B. IFRS permits recognition of the holding gains under certain circumstances.
C. Under IFRS, if in a given period, an asset increases in value, the firm does not record depreciation and amortization during that period.
D. Under U.S. GAAP, if in a given period, an asset increases in value, the firm does not record depreciation and amortization during that period.
E. all of the above

 

56. In accounting, depreciation and amortization involve a systematic process of  
A. cost allocation.
B. valuation.
C. recognizing holding gains.
D. sum-of-the-years’-digits.
E. declining balances.

 

57. When calculating the depreciation or amortization of long-lived assets management must 
A. measure the depreciable or amortizable basis of the asset.
B. estimate its service (useful) life.
C. decide the pattern of expiration of asset cost over its service life.
D. all of the above
E. none of the above

 

58. The terms salvage value and residual value refer to the estimated proceeds on the disposition of an  
A. asset, only.
B. asset less all removal costs, only.
C. asset less all removal and selling costs.
D. asset plus all removal and selling costs, only.
E. estimated proceeds on the disposition of an asset plus all selling costs, only.

 

59. Which of the following is not true? 
A. For buildings, common practice assumes a zero salvage value on the assumption that the costs a firm will incur in tearing down the building will approximate the sales value of the scrap materials recovered.
B. Tangible assets, with the exception of buildings, may have substantial salvage value.
C. Intangible assets related to a contractual right, such as landing rights at an airport or franchise rights to sell a franchiser’s products, generally expire at a specific time and therefore have zero residual value.
D. Identifiable intangibles acquired in a business combination that are separable, such as customer lists or brand names, may have significant salvage values.
E. none of the above

 

60. Some assets, such as a nuclear power plant, are not readily salable at the end of their useful lives, and retiring them may impose substantial costs. Which of the following is true? 
A. Firms must estimate the fair value of the dismantling costs and include that amount in the initial measurement of the asset.
B. Firms recognize a liability, referred to as an asset retirement obligation at the estimated  fair value of the dismantling costs
C. Firms compute depreciation based on the combined cost of the plant assets, including the fair value of the dismantling obligations.
D. all of the above
E. none of the above

 

 

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