Accounting 102 Q Which of the following statements about int

Accounting 102. Q: Which of the following statements about intangible assets is FALSE? The acquisition cost of a franchise or license is amortized over its useful life. Goodwill is recorded only by an acquiring company when it purchases another company. Patents are amortized over their useful life not their legal life. A trademark is the exclusive right to reproduce and sell a work of art.

Solution

Accounting 102. Q: Which of the following statements about intangible assets is FALSE?

The acquisition cost of a franchise or license is amortized over its useful life. - A franchisee capitalizes and amortizes the acquisition cost of franchise fee. Continuing Fees are being charged off as expense.

Goodwill is recorded only by an acquiring company when it purchases another company. – TRUE Internally developed goodwill is not capitalized; therefore, the only type of goodwill capitalized is goodwill purchased by the co.. Goodwill is the price paid in excess of the fair value of the identifiable net assets of an acquired company.

Patents are amortized over their useful life not their legal life. FALSE – THE PATENT IS AMORTISED FOR THE SHORTER OF THE USEFUL LIFE OR THE LEGAL LIFE.

A trademark is the exclusive right to reproduce and sell a work of art – FALSE COPYRIGHT IS THE the exclusive right to reproduce and sell a work of art