5) The process of writing off a natural resource is:
A) depreciation.
B) depletion.
C) amortization.
D) None of the above answers are correct.
6) The exclusive right to produce and sell musical work is called a:
A) copyright.
B) franchise.
C) patent.
D) goodwill.
7) The allocation of the cost of a intangible asset is known as:
A) depreciation.
B) depletion.
C) amortization.
D) accrual.
8) Intellectual property assets are:
A) depreciated.
B) depleted.
C) amortized.
D) expensed.
9) Which of the following is an example of an intangible asset?
A) Land
B) Goodwill
C) Inventory
D) Accounts Receivable
10) An exclusive right to the owner to sell or produce his or her discovery or invention is known as a:
A) franchise.
B) trademark.
C) patent.
D) copyright.
11) The write-off of an intangible asset is called:
A) depreciation.
B) amortization.
C) impairment.
D) deterioration.
12) A coal mine was acquired for $2,000,000. No salvage value was expected and the number of tons of
coal is estimated to be 1,000,000 tons. During for first year, 100,000 tons of coal was mined and sold. The
first year depletion expense is:
A) $1,000,000.
B) $100,000.
C) $2,000,000.
D) $200,000.
13) To record the depletion of natural resources, the most common method is to use the double declining–
balance method.
14) Patents, copyrights, and franchises are intangible assets with the same number of years of useful life.
15) Copyright protection expires 70 years after the author’s death.
16) The portion of a natural resource cost that is recognized as an expense is ________.
17) The intangible that is recorded when a business is purchased for more than the fair value of the net
assets is known as ________.
18) The three categories of writing off plant assets, natural resources, and intangible assets are ________,
________, and ________, respectively.
19)
Column 1 Column 2 Column 3 Column 4
Loss on goodwill
20)
Column 1 Column 2 Column 3 Column 4
Coal deposit
21)
Column 1 Column 2 Column 3 Column 4
Gain from sale of plant asset
22)
Column 1 Column 2 Column 3 Column 4
Goodwill
23)
Column 1 Column 2 Column 3 Column 4
Loss from fire
24)
Column 1 Column 2 Column 3 Column 4
Amortization Expense, Patent
25)
Column 1 Column 2 Column 3 Column 4
Depletion of coal mine
26)
Column 1 Column 2 Column 3 Column 4
Franchise
27)
Column 1 Column 2 Column 3 Column 4
Accumulated depletion, coal mine
28)
Column 1 Column 2 Column 3 Column 4
Copyright
29)
Column 1 Column 2 Column 3 Column 4
Loss on disposal of plant asset
30)
Column 1 Column 2 Column 3 Column 4
Patent
31)
Column 1 Column 2 Column 3 Column 4
Depreciation expense
32)
Column 1 Column 2 Column 3 Column 4
Accumulated depreciation
33)
Column 1 Column 2 Column 3 Column 4
Equipment
34)
Column 1 Column 2 Column 3 Column 4
Land improvements
35)
Column 1 Column 2 Column 3 Column 4
Building
36)
Column 1 Column 2 Column 3 Column 4
Land
37)
Column 1 Column 2 Column 3 Column 4
Merchandise Inventory
38) On January 1, 201X, Maxwell Company bought a patent for $60,000. Its estimated useful life is six
years. Record the amortization for the first two years.
39) If a coal deposit has 700,000 tons available and was purchased for $1,400,000, record the removal of
50,000 tons in year 1 and 70,000 tons in year 2.