16.Under U.S. generally accepted accounting principles (GAAP), which of the following costs associated with intangible assets is most likely to be capitalized?

A)   The cost of an acquisition of a patent from an outside entity.

B)   Research and development costs associated with software development.

C)   The costs associated with an internally created trademark.

D)   Advertising expenses.

17.Under U.S. Generally Accepted Accounting Principles (GAAP), development cost of patents and copyrights can be capitalized:

A)   when purchased from other entities.

B)   when developed internally.

C)   only as goodwill in purchase transactions.

D)   when purchased or developed internally but excluding registration costs.

18.Under U.S. GAAP:

A)   advertising costs for other than direct-response advertising costs are expensed as incurred.

B)   firms are allowed to capitalize research and development (R&D) costs when specific criteria are met.

C)   goodwill can be capitalized only in pooling of interest method transactions.

D)   franchise or license costs for agreements of less than five years are expensed as incurred.

19.Which of the following is least likely to be a problem with accounting for internally generated intangible assets?

A)   Costs of developing these assets may not be easily separable.

B)   Potential benefits are difficult to measure.

C)   The potential benefits are spread over a long time period.

D)   Determining the economic life.

20.Statement of Financial Accounting Standard (SFAS) 86 requires that costs incurred to establish the feasibility of computer software must be:

A)   capitalized only after the software is completely developed.

B)   expensed once the economic feasibility is established.

C)   viewed like Research & Development (R&D) costs and expensed as incurred.

D)   partially expensed and the rest capitalized and amortized over the expected economic life.

21.Under U.S. GAAP, which statement is correct?

A)   Purchased patent and copyright costs are not expensed.

B)   Advertising costs are not expensed when incurred.

C)   Goodwill cannot be recognized and capitalized in a purchase transaction.

D)   Research and development costs are not expensed.

答案和详解如下：

16.Under U.S. generally accepted accounting principles (GAAP), which of the following costs associated with intangible assets is most likely to be capitalized?

A)   The cost of an acquisition of a patent from an outside entity.

B)   Research and development costs associated with software development.

C)   The costs associated with an internally created trademark.

D)   Advertising expenses.

The correct answer was A)

The cost of an acquisition of a patent from an outside entity is correct because this cost may be capitalized.

17.Under U.S. Generally Accepted Accounting Principles (GAAP), development cost of patents and copyrights can be capitalized:

A)   when purchased from other entities.

B)   when developed internally.

C)   only as goodwill in purchase transactions.

D)   when purchased or developed internally but excluding registration costs.

The correct answer was A)

When patents and copyrights are internally developed, only the legal fees incurred for registration can be capitalized. However, if the patents and copyrights are purchased from other entities, full acquisition cost can be capitalized.

18.Under U.S. GAAP:

A)   advertising costs for other than direct-response advertising costs are expensed as incurred.

B)   firms are allowed to capitalize research and development (R&D) costs when specific criteria are met.

C)   goodwill can be capitalized only in pooling of interest method transactions.

D)   franchise or license costs for agreements of less than five years are expensed as incurred.

The correct answer was A)

In the U.S., research and development (R&D) costs are always expensed when incurred. Advertising costs are also expensed as incurred. However, direct response advertising costs can be capitalized when specific criteria are met. Goodwill may be recognized and capitalized only in purchase method transactions. Franchise or license costs may be capitalized regardless of the time period of the agreement.

19.Which of the following is least likely to be a problem with accounting for internally generated intangible assets?

A)   Costs of developing these assets may not be easily separable.

B)   Potential benefits are difficult to measure.

C)   The potential benefits are spread over a long time period.

D)   Determining the economic life.

The correct answer was C)

The problems with accounting for internally generated intangible assets are: determination of economic life, separation of the cost for development, and measurement of potential benefits.

20.Statement of Financial Accounting Standard (SFAS) 86 requires that costs incurred to establish the feasibility of computer software must be:

A)   capitalized only after the software is completely developed.

B)   expensed once the economic feasibility is established.

C)   viewed like Research & Development (R&D) costs and expensed as incurred.

D)   partially expensed and the rest capitalized and amortized over the expected economic life.

The correct answer was C)    

SFAS 86 requires that all the costs incurred in establishing software feasibility be viewed as R&D costs and expensed as incurred. Once the economic feasibility has been established, subsequent costs (for software to be sold or leased to others) can be capitalized as part of product inventory.

21.Under U.S. GAAP, which statement is correct?

A)   Purchased patent and copyright costs are not expensed.

B)   Advertising costs are not expensed when incurred.

C)   Goodwill cannot be recognized and capitalized in a purchase transaction.

D)   Research and development costs are not expensed.

The correct answer was A)

Purchased patent and copyright costs are not expensed is correct because these costs are capitalized.