Question : 61. Productive assets that physically used up, or depleted are: : 1255979

 

 

61. Productive assets that are physically used up, or depleted are:

a. Equipment.

b. Land.

c. Land improvements.

d. Natural resources.

 

62. The legal life of a patent is:

a.Forty years.

b.Twenty years.

c.Life of the inventor plus fifty years.

d.Indefinite.

 

 

63. An exclusive 20-year right to manufacture a product or to use a process is a:

a. Patent.

b. Copyright.

c. Trademark.

d. Franchise.

 

 

64. The exclusive right to benefit from a creative work, such as a film, is a:

a.Patent.

b.Copyright.

c.Trademark.

d.Franchise.

 

65. A word, slogan, or symbol that distinctively identifies a company, product, or service is a:

a. Patent.

b. Copyright.

c. Trademark.

d. Franchise.

 

66. Research and development costs should be:

a.              Expensed in the period incurred.

b.               Expensed in the period they are determined to be unsuccessful.

c.               Deferred pending determination of success.

d.               Expensed if unsuccessful, capitalized if successful.

 

67. Morgan Pharmaceutical spends $50,000 this year in research and development for a new drug to cure liver damage. By the end of the year, management feels confident that the new drug will gain FDA approval and lead to higher future sales. What impact will the $50,000 spending have on this year’s financial statements?

a.

Increase Assets.

b.

Decrease Revenues.

c.

Increase Expenses.

d.

Increase Revenues.

 

 

68. Aspen, Inc. developed a new horse transport device and incurred research and development costs of $250,000. Rather than continue with their own research, Aspen decided to purchase a patent for a similar design from Vail, Inc. for $350,000. What are the total assets and expenses for these developments?

a.

Assets $600,000; Expenses $0.

b.

Assets $250,000; Expenses $350,000.

c.

Assets $350,000; Expenses $250,000.

d.

Assets $0; Expenses $600,000.

 

 

69. Research and development costs should be capitalized when the:

a.

Future benefit is probable and the amount can be reasonably estimated.

b.

Future benefit is reasonably possible and the amount can be reasonably estimated.

c.

Future benefit is probable and the amount cannot be reasonably estimated.

d.

None of the above are correct as research and development costs are never capitalized under U.S. accounting rules.

 

 

70. Bio-Lab Pharmaceuticals carried on a project to develop a new drug that dramatically shortened the recovery period for flu infection. The project cost the company $150,000 before Bio-Lab abandoned the project due to the slim possibility to gain FDA approval. Bio-Lab then spent $300,000 on another project developing a kind of shot that achieves the same goal for flu recovery, and the company is confident in gaining FDA approval for the new shot and in making profits out of the shot. What amount would be expensed?

a.

$0.

b.

$150,000.

c.

$300,000.

d.

$450,000.