Question

1. Acquiring assets like copyrights and patents from outside owners, instead of being internally developed results in intangible assets with large monetary balances. True or False

2. Legal expenses is also capitalized into the cost of intangible assets and then amortized over the legal life or the estimated useful life of the asset. True or False

3. Goodwill is recorded if an excess of the fair value of a company's assets is paid just to entice the owner of the other company to sell. True or False

4. Which of the following could be a reason for a company acquiring another to pay over and above its net asset value?

Question 4 options:

	a. The company had internally developed some copyright which were valued very low in their books of account.
	b. The company had land whose value after appraisal were very high.
	c. The company had trained and highly qualified employees.
	d. The company had trademark with a long useful life.
	e. The company had no liabilities at the time of acquisition.

Answer 1

1. Acquiring assets like copyrights and patents from outside owners, instead of being internally developed results in intangible assets with large monetary balances -   True
2. Legal expenses is also capitalized into the cost of intangible assets and then amortized over the legal life or the estimated useful life of the asset. - false
3. Goodwill is recorded if an excess of the fair value of a company's assets is paid just to entice the owner of the other company to sell. - True
4. . Which of the following could be a reason for a company acquiring another to pay over and above its net asset value?

d.The company had trademark with a long useful life.

because , in first option copy right and patient is a depreciating asset , in second option land already may valued in revaluation , in third option employee will not consider as company's asset , in the fifth option the liability will be alredy calculated in revaluation.