31. U. S. GAAP requires that a company should capitalize goodwill and adjust its value if subject to impairment.
32. A revenue expenditure is an operating expense.
33. A capital expenditure is charged to owners'_ capital.
34. The Sarbanes-Oxley Act requires that companies disclose whether they have a code of ethics that applies to the CEO, CFO, and Chief Accounting Officer.
Multiple Choice Questions
35. After March, 2004 international standards required that goodwill
A. Be capitalized and amortized over 20 years or less.
B. Be capitalized and amortized over 40 years or less.
C. Be capitalized and reviewed annually and its value should be adjusted if impaired.
D. Be expensed immediately.
36. If an asset is determined to be impaired, it should be:
A. depreciated only using the straight-line method.
B. written up to its historical cost.
C. reclassified as a liability.
D. written down to its fair market value.
37. All of the following may be considered intangible assets except:
A. Accounts receivables
B. Copyrights
C. Franchises
D. Goodwill
38. When straight-line depreciation is in use, the depreciation rate of an asset is equal to
A. 1 divided by the life of the asset
B. 1 divided by the cost of the asset
C. The cost of the asset divided by the life of the asset
D. The cost of the asset less its salvage value divided by the life of the asset.
39. When a depreciable asset is sold at a price equal to its book value, a journal entry would include
A. A credit to the asset account for its book value
B. A debit to accumulated depreciation
C. A credit to accumulated depreciation
D. A credit to cash
40. All of the following assets are amortized except:
A. Patents
B. Franchises
C. Copyrights
D. Natural resources