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1. Self-Starter Sports Ltd (Self-Starter Sports) internally developed several assets. Which one of the following internally generated assets should be recognised in accordance with IAS 38 Intangible Assets? Assume that the expected future economic benefits of the internally generated assets are probable and the cost of the asset can be measured reliably.CorrectIncorrect
2. A newly set up dot-com entity has engaged you as its financial advisor. The entity has recently completed one of its highly publicized research and development projects and seeks your advice on the accuracy of the following statements made by one of its stakeholders. Which one is it?CorrectIncorrect
3. Which item listed below does not qualify as an intangible asset?CorrectIncorrect
4. Which of the following items qualify as an intangible asset under IAS 38?CorrectIncorrect
5. Once recognized, intangible assets can be carried at:CorrectIncorrect
6. Which of the following disclosures is not required by IAS 38?CorrectIncorrect
7. The definition of an intangible asset comprises: (i) Identifiability (ii) Control over a resource (iii) Existence of future benefits (iv) Residual valueCorrectIncorrect
8. An undertaking can choose either the cost option or the revaluation option, as its accounting policy. It must apply the chosen model to:CorrectIncorrect
9. Using the revaluation option, can fair values be estimated, if there is no market-based evidence?CorrectIncorrect
10. Control is:CorrectIncorrect
11. Research costs can be capitalised:CorrectIncorrect
12. Which of the following assets is not an intangible asset?CorrectIncorrect
13. Which of the following statements, relating to intangible assets is / are correct?
a) Research on market potential, prior to launching a product, can be capitalised
b) Applied research, calculated to achieve a stated aim, can be capitalised.
c) An asset should never be capitalised if it has no physical existence
d) A resource, though intangible, may be capitalised, if it qualifies to be capitalised if it is identifiable and meets the capitalisation criteriaCorrectIncorrect
14. Which of the following qualities should an asset possess for it to qualify for recognition as an asset?
a) It should have physical existence
b) It should be within the entity’s control
c) It should always be separable i.e. realizable without selling the whole business
d) There should be a probability of future economic benefit from itCorrectIncorrect
15. Which of the following intangibles is the only one which may be capitalised, at least initially, though (i) it is not separable (ii) there is no active market in it and (iii) flow of economic benefit from it is not probableCorrectIncorrect
16. A company paid £10 million to acquire a reputed brand name. Although there is no active market in that asset it is permitted to report the brand name as an asset for which two of the following reasons?
a) It was so very expensive to acquire
b) Its cost has been established by a market transaction
c) It is a name of such high market reputation
d) Future economic benefits from it are probable because otherwise it would not have been acquired at such a cost.CorrectIncorrect
17. Which of the following intangibles is/ are prohibited from being recognised as an asset?
a) Home grown goodwill
b) Separately acquired intangible
c) Internally generated intangibles
d) Goodwill acquired as part of an on-going businessCorrectIncorrect
18. For which one or more of the following reasons is the recognition as an asset of an internally generated intangible prohibited?
a) Because there may not be an active market for that asset
b) Because its cost is usually relatively insignificant
c) Because it is difficult to reliably identify the related costs
d) Because it is difficult to establish the probability of flow of economic benefitsCorrectIncorrect
19. Which one or more of the following is /are essential for recognising an intangible asset (other than goodwill) when a business is acquired as a going concern?
a) There is a probability that future economic benefits would arise from it
b) It should have been reported as an asset by the business acquired.
c) Its value should have been stated on the agreement for buying the business
d) There should be a reliable basis for valuing itCorrectIncorrect
20. Which of the following expenses should be capitalised?CorrectIncorrect
21. A company is searching for a white board marker the writings of which, instead of being rubbed off, may be blown out when lecturers breathe on them from a distance. Which of the following expenses incurred by the company qualifies to be classified as development cost?CorrectIncorrect
22. Which of the following need to be established before development costs are capitalised?
a) A customer should have ordered the development of the product
b) The cost of the product should be reliably identified
c) The business should have all necessary resources to complete the project
d) The business should be committed to completing the developmentCorrectIncorrect
23. If a development projects meets with all the conditions stipulated in IAS 38, the requirement of the standard is that the costs of that project?CorrectIncorrect
24. Which of the following are valid reasons for capitalising development costs?
a) For properly matching the cost of a development with benefits arising there from
b) To ensure that resources available for generating income are fully reported
c) Otherwise there will be reluctance to develop new projects
d) Otherwise there would be an anomaly between developed asset and purchased oneCorrectIncorrect
25. Which of the following are reasons for writing off research & development costs as expenses?
a) Poor co-relation between costs and delayed flow of economic benefit
b) It may not always be probable that there will be a flow of future economic benefit
c) To keep the cost of development a secret from rival companies
d) Otherwise the liquidity of the company could be at peril.CorrectIncorrect
26. The cost of goodwill purchased as part of an acquisition of an on going business shall be?CorrectIncorrect
27. Intangible assets, other than goodwill, acquired as part of an on-going business or acquired separately:
a) Should be never amortised
b) Should be amortised systematically over its estimated useful life
c) Should be written off over not more than five years
d) Should be reviewed for impairment if their useful life is regarded as indefinite.CorrectIncorrect
28. Which of the following statements with regard to accounting for goodwill and other intangibles is not correct?CorrectIncorrect
29. Subsequent expenditure on brands, mastheads, publishing titles, customer lists and similar items must always be recognised in profit or loss as incurred.CorrectIncorrect
30. Purchased goodwill is shown in the statement of financial position because it has been paid for. It has no tangible substance, and so it is an intangible non-current asset. It is dealt with under:CorrectIncorrect