ACCT 305 Week 2 Quiz

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 1.Question :(TCO 2) An exclusive 20-year right to manufacture a product or use a process is a:
Student Answer: Patent
 Copyright
 Trademark
 Franchise

 

 2.Question :(TCO 2) Lake Incorporated purchased all of the outstanding stock of Huron Company paying $950,000 cash. Lake assumed all of the liabilities of Huron. Book values and fair values of acquired assets and liabilities were:

The journal entry to record this acquisition would include a:

Student Answer: Debit to Cash in the amount of $875,000
 Credit to Cash in the amount of $950,000
 Debit to Goodwill in the amount of $350,000
 Debit to liabilities in the amount of $175,000

 

 3.Question :(TCO 2) Software development costs are capitalized if they are incurred:
Student Answer: Prior to the point at which technological feasibility has been established.
 After commercial production has begun.
 After technological feasibility has been established but prior to the product availability date.
 None of the above is correct.

 

 4.Question :(TCO 2) Under U.S. GAAP, research expenditures are:
Student Answer: Expensed in the period incurred.
 Expensed in the period they are determined to be unsuccessful.
 Capitalized if certain criteria are met.
 Expensed if unsuccessful, capitalized if successful.

 

 5.Question :(TCO 2) Goodwill has:
Student Answer: A life of seventy years.
 An indefinite life.
 A life of twenty years.
 A life of forty years.

 

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