Reference no: EM132702820

Question 1: An intangible asset is an asset with no physical form that is valuable because of the special rights it carries.

Question 2:  Regarding impairment of intangible assets, which of the following statements is incorrect?

A) Impairment occurs when the fair value of an intangible asset is less than the book value.
B) Intangible assets are impaired when there has been a permanent decline in the value of the asset.
C) Intangible assets with an indefinite life are tested for impairment annually.
D) If any impairment occurs, the company records a loss in the period in which the intangible asset was acquired.

Question 3:  A trademark represents the exclusive right to reproduce and sell a book, musical composition, film, other work of art, or intellectual property.

Question 4:  According to Generally Accepted Accounting Principles, if the fair value of goodwill decreases below its book value, an impairment loss must be recorded.

Question 5:  Which of the following statements about franchises is correct?

A) Franchises are privileges granted by a government to use public property in performing services.
B) The acquisition cost of a franchise is always amortized over its legal life.
C) Franchises are privileges granted by a business to sell goods or services under specified conditions.
D) The acquisition cost of a franchise cannot be amortized because its useful life cannot be determined.